University of Salford Annual Report and Financial Statements for the year ended 31st July 2006 Contents
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Annual Report 1
Vice-Chancellor’s Introduction 2-3 Sharing knowledge forging partnerships 4-6 Shaping graduates – supporting society 7-8 Nurturing experiences – creating opportunities 9-10 Maximising research – tackling issues 11-14 Thinking globally – broadening horizons 15-17 Encouraging recognition – celebrating success 18-21 Statistics 22 Financial Statements 23 Membership of the Council 2005 - 06 24 Financial Review 25-26 Group Structure 26
Statement of Primary Responsibilities 27 Corporate Governance Statement 28-29
Statement of the Council’s Responsibilities and Internal Control 30-31 Report of the Independent Auditors to the Council of the University of Salford 32-33 Consolidated Income and Expenditure Account 34
Consolidated Statement of Historical Cost Surpluses and Deficits 35
Consolidated Statement of Total Recognised Gains and Losses 35
Consolidated Balance Sheet 36
University Balance Sheet 37
Consolidated Cash Flow Statement 38
Statement of Principal Accounting Policies 39-40
Notes to the Accounts 41-65 Annual Report & Financial Statements
Annual Report Annual Report & Vice-Chancellor’s introduction Financial Statements
Vice-Chancellor’s introduction
Taking stock – looking ahead Our programmes to educate and develop highly employable graduates and to draw on all those who can benefit from The academic year 2005 – 2006 witnessed considerable higher education are also included. As you will also see, our achievements for the University in all aspects of its activity. striking and highly successful engagement with ‘real world research’ continues to grow and, reflecting a new strategic Last year the University adopted a new and radically revised goal, we are committed to internationalising all aspects of Strategic Framework for development over the next decade. the University. The Strategic Framework 2005-2015 (available at www.planning.salford.ac.uk) aims to clearly set out how we intend to pursue our mission as an ‘enterprising university’. The financial report and accounts show that the underlying performance of the University was sound, continuing the pattern of income growth that has been sustained in recent We intend to achieve internationally recognised excellence in: years. From 2006-7 our income will be further boosted by the ■ Education for capability. advent of the new undergraduate student fee arrangements. ■ Research for the real world. However, much of this extra income will be needed to meet the substantial rises in staff pay that have been agreed, ■ Partnership with business and the community. following the resolution of the lengthy and difficult industrial dispute in 2005-6 as well our plans for greatly increased As a leading enterprising university we will: expenditure on our campus.
■ Harness the skills, imagination and enthusiasm of our staff and students to work in close alliances with our The first stages of this investment have been completed with external partners. the official opening of our new £22m Mary Seacole building for the Faculty of Health & Social Care by Dame Tanni ■ Be innovative and effective in the application of new Grey-Thompson in May 2006, and the extensive refurbishment knowledge to individual, social and economic of our Peel Park site. Work now continues to provide new development, working across traditional disciplinary student housing on campus, our £10m Law School building and professional boundaries. and brand new accommodation for our Faculty of Arts, Media ■ Seek continuous improvement in all aspects of our activities & Social Sciences. and in our responsiveness to the changing needs of our students, staff and external partners.
■ Adopt a friendly, customer focused ethos, delivering to students an excellent experience of higher education; to staff, a rewarding and developing career; and to external partners, an effective and timely response to their changing needs.
This Annual Report highlights some of the many ways in which we are already delivering these aspirations, with examples taken from our widening and increasingly internationally recognised work in Academic Enterprise.
2 The Mary Seacole building Annual Report & Vice-Chancellor’s introduction Financial Statements
Finally, I would like to thank all those staff and students who made our success over the past year possible. Several long serving and valued members of staff retired during this period and they leave with our special thanks and best wishes for the future.
While it is not possible to list all those who have left us, I must make special mention of Dr Malcolm Winton, who retired in May 2006. Malcolm spent most of his career at Salford, for the last 14 years as our Registrar (only the second in the University’s history). He saw the University through some difficult times and we are all greatly in his debt. He is succeeded by Dr Adrian Graves who comes to us from Robert Gordon University and who has had a distinguished career in The proposed new Law School academic administration in the UK and Australia.
For the past two years we have been intensively examining how we organise and manage the University. The final report of the Deciding the Future group, which I chaired, was Michael Harloe approved by Senate and Council at the end of 2006, following December 2006 an intensive period of staff consultation on its recommendations. These are far-reaching and will be progressively implemented over the next two to three years.
We recognise that many of the ways in which a ‘traditional’ university like Salford has operated in the past are no longer suitable for modern times and especially for a university committed to enterprise in all that it does. New ways need to be found both to strengthen and improve our management and to engage staff and foster a real feeling of involvement in the institution and in helping to shape its future. Staff support for change is evident in all parts of the University and now we shall work hard to deliver it.
3 Annual Report & Sharing knowledge – forging partnerships Financial Statements
Sharing knowledge - forging partnerships
At the University of Salford, we know that real life presents In November 2005 the CFS team were presented with the daily challenges to business, industry and the community. Times Higher Education Supplement Award for research and That is why we are perfectly positioned to form effective development of these Trusts. partnerships – and to share and promote this knowledge and expertise at every opportunity. Speaking about the award, Liz Thomas, Senior Advisor on Widening Participation for the Higher Education Academy, We have always maintained strong links with business and said: “This is an exciting and very impressive project that has been rooted in the community. We play a valuable role in had an impact on communities across the UK. It is an facilitating constructive knowledge sharing amongst excellent example of using research to inform practical organisations and society. Whether it’s through developing developments at the local level and political change at the business partnerships, linking with community groups or national level.” encouraging collaboration amongst industries, the past year has consolidated our reputation as experts at ‘reaching out’ to Pioneering practices business and the community.
Our Academic Enterprise division has developed a unique Supporting society benchmarking partnership called UPBEAT – University Partnership to Benchmark Enterprise Activities and The University of Salford is committed to contributing to the Technologies. This pioneering assessment tool is led by the economic, social and cultural life of the community. University in partnership with four UK universities and a Community Finance Solutions (CFS) was established after a consortium of European universities in order to drive team of Salford researchers developed a radical model for continuous improvement in all outreach activities to business providing affordable credit. They use community-based and the community. financial institutions to help individuals, small businesses and communities acquire financial security. The project was developed when staff at our Academic Enterprise division discovered that, apart from monitoring the Now a thriving national organisation, CFS offers practical financial success of outreach work, there was no holistic way solutions to this problem – schemes like Community of measuring the social and economic benefits of a project. Reinvestment Trusts (CRTs), high street shops providing flexible, Using a unique four-scale matrix system, UPBEAT has the affordable loans and banking services. The Trusts provide a ability to accurately assess what difference outreach projects way of offering instant and affordable credit to people have made business and the community. who usually have to rely on legal, but unscrupulous ‘doorstep moneylenders’. During the past year, the UPBEAT team has worked with several initiatives to evaluate their success and is in the process There are now ten urban and three rural CRTs in the UK, and of collaborating with another five universities on the project. they lend £5m to more than 6,000 people. This year, the Treasury has made them a priority initiative as part of its financial inclusion strategy.
4 Annual Report & Sharing knowledge – forging partnerships Financial Statements
Innovation Cells CAMPUS
At Salford, we continuously develop and extend new The University’s business club - the first of its kind in the UK - partnership arrangements in order to maintain our position as celebrated its 25 year anniversary in June 2006. The Campaign an enterprising university at the leading edge. Our ‘Innovation to Promote the University of Salford (CAMPUS) was created in Cells’ project puts external organisations in touch with staff 1981 to promote links between the University and its external and students in order to get good ideas off the ground – and partners, and through those links to help support the transform them into realistic business propositions. University’s goals and aspirations.
Each ‘Cell’ – or group – enables small teams of like-minded The organisation provides members with access to the creative people from across the University to develop real University’s wide-ranging expertise and facilities, and organises products and services that are ready for market, a varied programme of events for them. There are now over 170 organisations enjoying membership and over 300 associates and supporting members. In November 2005 Innovation Cells meet regularly and, using the programme’s Professor Peter Bowker was appointed as CAMPUS’s fourth unique step-by-step process, consider issues such as problem director to replace Mike Goldsmith, who retired. solving, idea generation and patenting. Each Cell member has access to useful business contacts, academic expertise and a small budget. Worldwide partnerships
One member recently launched his idea to commercialise The University develops and maintains many strong links with veterinary prosthetics – the development of artificial limbs for organisations abroad as well as in the UK. In the past year, for animals. With the support of the Innovation Cells, what example, we have forged partnerships with Cyprus College in started as a good idea has now been developed into a the country’s capital, Nicosia. Salford now has an agreement fully-functioning brand – and has already started trading with the College whereby Cypriot students spend their third with veterinary practices across the UK. year studying on our English Language, Computer Science or Music programmes.
From affordable art and educational games to aqua-natal classes and childbirth DVDs, in the past year our Innovation In July, the School of Media, Music & Performance’s Dr Mick Cells have helped business and industry to really take Wilson was invited to Cyprus College to help establish a new advantage of our commercially viable products and services. BA Music Performance degree. Salford was selected because of our music programmes’ strong international reputation and Mick provided expertise in music teaching and curriculum development.
Artificial limbs for animals 5 Annual Report & Sharing knowledge – forging partnerships Financial Statements
Leading edge facilities To begin the process, the KTP team at Salford is approached by a company, based anywhere in the country, that needs help with a strategic problem – the launch or development of a At Salford, we optimise our state-of-the-art facilities for the product, for example. mutual benefit of our partners and ourselves. In February 2006 a new addition to our ever-increasing resources was the Think Lab, a cutting edge laboratory enabling staff across the Once they’ve approached the University, a source of expert University to engage in the latest research supported by knowledge is identified – in the form of a University of Salford advanced Information and Communications Technology. academic –who is going to help them. When the initial contact between the company and the academic has been made we develop the proposal for submission to the Featuring interactive exchanges, virtual displays and video Department of Trade and Industry. To date, all our conferencing, the Think Lab is the most advanced facility of its submissions have been approved. kind in Europe. It combines futuristic interior design with the very latest in communication and virtual reality technology. During the past year our KTPs have gone from strength to strength, with staff and students joining forces with four new The brainchild of staff from the Institute of the Built & Human businesses including The Hilly Clothing Company, Environment and the Information Research Institute, the manufacturers of hi-tech running apparel, and local £1.3m centre was funded by the Science Research and wholesalers Valves Instruments Plus. Investment Fund.
It has already gained the attention of high profile business people, including former BBC broadcaster and North West Development Agency Director, Felicity Goodey, who sits on the Think Lab Advisory Group.
Knowledge Transfer Partnerships
Salford was one of only two universities to pilot Knowledge Transfer Partnerships (KTPs) exactly 30 years ago. KTPs are Government-funded three-way collaborations between an academic, a company that needs their expertise and a recent graduate recruited to work on a project for that business. It is the job of our Academic Enterprise division to bring all three together and establish the partnership. The Think Lab
6 Annual Report & Shaping graduates – supporting society Financial Statements
Shaping graduates – supporting society
At Salford, we’re committed to producing graduates with the Personal Development Planning skills, creativity, confidence and adaptability to succeed in the workplace and make a positive contribution to society. All students at Salford are provided with opportunities to invest in their personal and academic development through a Salford graduates are prominent in business, industry and process called Personal Development Planning (PDP). This non-governmental organisations worldwide. It’s no surprise provides a framework within which students are encouraged that over 90% of our graduates gain employment or go on to to reflect upon their own learning, performance and further study within six months of graduating. achievement and to plan for their personal, educational and career development. Employability strategy In the last year we continued implementing processes of PDP Our new Employability Strategy is designed to consolidate and in line with the University’s aim to make processes available to enhance existing initiatives within the University and to ensure all students. The introduction of PDP demonstrates our that all our students have the opportunity to engage in ongoing commitment to ensuring our graduates are provided learning that enhances their employability. with opportunities to develop the necessary skills required to become successful ‘lifelong learners’.
The Strategy recognises how we have led the way in this Key Skills regard and consolidates our long-standing experience developing opportunities for both work-related and work-based learning opportunities within our degree Key skills are sometimes referred to as 'transferable skills'. programmes. It also aims to ensure that all of our students The ability to articulate, evidence and transfer the key skills have the opportunity to engage in learning that develops their of communication, numeracy, information technology, team key enterprise and employability skills. work, problem solving and managing one’s own learning, has been recognised by employers and universities as being essential to improving employability and supporting personal In addition, the Strategy further develops and enhances good development and lifelong learning. curriculum design, informed by engagement with employers and professional bodies, as well as access to careers education, information and guidance; opportunities for volunteering; and, The Salford Key Skills Project initiated the development of through the provision of structured and supported processes, the curriculum to embed key skills in all aspects of teaching, personal and professional development planning. learning and assessment, to ensure our graduates will be better prepared to succeed in a competitive and fast-moving job market. This year, work undertaken through the Key Skills The introduction of this Strategy therefore builds on existing project informed our Employability Strategy. good practice at the University and demonstrates our ongoing commitment to the enhancement of the employability of all our graduates.
7 Annual Report & Financial Statements Shaping graduates – supporting society
Volunteering@Salford First destination statistics
Our Volunteering@Salford scheme promotes and supports Our careers advisors collect data on the first destination of volunteering by staff and students in local communities. leavers (as at six months after graduation). The figures for Volunteering has a number of benefits for both staff and those who graduated in 2005 entering employment have students, including increasing employability, acquiring new remained strong in a graduate market that has not been as skills and building confidence, and making a difference to buoyant as the previous year. local communities. Once again, the statistics show a below average level of Students who have undertaken volunteering placements as unemployment. This figure is down slightly this year, matched part of Independent Learning Modules have spoken of having by an equivalent rise in people going into further study and gained valuable experience, and the majority have continued training. There continues to be a high proportion of Salford to volunteer with the organisations. Volunteering has also graduates finding work in the North West region, many with been shown to be popular with employers, (in research small and medium sized companies and in the public and undertaken by TimeBank in 2004). Indeed, 81% of employers health sectors. surveyed viewed employees who do voluntary work positively.
One recent example of a Volunteering@Salford project is Summerville Primary School, the first school in Salford to be awarded a Green Flag as an Eco School. Our volunteers developed a nature area in the school grounds – including a wildlife pond and woodland walk. The partnership continues to grow between the school and the University, with related projects in development.
Work is also underway to develop themed volunteering events and projects, and there are new initiatives to support student-led volunteering, including environmental volunteering and an International Conversation Club to support the relationship between international and home students. Graduates at the Lowry
8 Annual Report & Nurturing experiences – creating opportunities Financial Statements
Nurturing experiences – creating opportunities
The University of Salford is committed to providing a top Student experience quality learning and working experience for everyone, regardless of background. We focus on attracting and To reinforce our commitment to providing our students with retaining all students who are able to benefit from our the best possible experience during their time at Salford, we excellent learning opportunities. have formed a dedicated Student Experience Group. The Group has been looking at initiatives designed to further The last year has provided many opportunities for further improve students’ overall time with us – during both their improving the staff and student experience and opening up study and their leisure time. new opportunities for learning.
A total of 21 Student Liaison Representatives (SLRs) were Salford Young People’s University appointed for the 2006-07 academic year. A joint initiative between the University and the Students’ Union, the positions It was another good year for Salford Young People’s University are funded by our Academic Development Fund and involve (SYPU), our unique residential summer school giving the SLRs being paid for their time. Each SLR acts as a conduit youngsters who wouldn’t normally consider higher education between their particular School and the wider University and a taste of university life. This summer an unprecedented 331 provides valuable feedback on general issues, ensuring that young people aged 11 to 15 took part in three programmes. the voice of the students is considered at the strategic planning stage.
For the first time, all ten boroughs of Greater Manchester attended the Year 8 programme (ages 11-12), making this the The University is also implementing Salford’s first ever Student first regional summer school programme funded by Aimhigher Experience Survey from October 2006 to provide staff with Greater Manchester. The participants enjoyed courses in valuable information about the student experience. The sports, art, performing art and technology and were Student Experience Survey will comprise two stages – supervised by our team of 32 student group leaders. qualitative (eg focus groups/in-depth interviews) and quantitative (where students rate services, etc online). The Survey is intended to help the University develop an The Year 8 graduation ceremony was again very popular with understanding of our students’ expectations and perceptions. over 800 people attending. Paul George, a Salford graduate This, in turn, will enable us to set goals for service from Leisure Management, spoke at the graduation about his improvement which could be used to monitor progress. life as a world championship body builder and how university had helped him realise his dreams of owning and running a gym. With other initiatives underway, including a Vice-Chancellor’s newsletter to students, an improved student intranet channel and a new-look induction pack, the Student Experience Group Feedback from the young people’s parents revealed that 83% continues its work to enhance our students’ time at Salford. of them had not attended university and that 99% strongly agreed or agreed that they now felt more confident about their child going on into higher education. SYPU is planning to involve undergraduates in a research programme to track and measure the impact of SYPU over the past seven years. This work will provide a basis for further development and provide essential data to bid for additional funding. It will also offer further opportunities for our undergraduates to gain invaluable work experience and increase their employability. 9 Annual Report & Nurturing experiences – creating opportunities Financial Statements
Staff awards Innovative courses
At Salford, we aim to instil a sense of achievement within all Salford is renowned for its relevant, ground-breaking our staff by recognising and rewarding outstanding success. programmes which effectively prepare students for the world Every year, dedicated teams of staff and individuals throughout of work. We were the first university in the country to offer a the University are presented with merit awards. Teams can course in Popular Music and our pioneering Stand-Up Comedy nominate themselves or be nominated by others and module boasts Phoenix Nights comedian Peter Kay as one of individuals are put forward by their managers. The criteria its graduates. include outstanding job performance, achievement of a significant objective, attitude to work and service provided. The past year has seen several new additions to our portfolio of innovative courses. New for 2006 is our unique BA Last year’s awards were highly successful, with a large number Journalism and War Studies – the only undergraduate degree of strong nominations from both academic and support staff. combining the two disciplines in the UK. This course combines Director of Personnel Malcolm Willis said: “We were delighted the expertise of professional journalists with one of the largest with the number of nominations. It’s all about recognising teams of military historians in the country. Ideal for budding and rewarding the teams that have put in the extra effort to war correspondents, students have access to a fully equipped make a difference. The quality of the nominations was a real modern newsroom with all the latest technology. tribute to all the teams concerned.” We have teamed up with Preston-based Myerscough College to launch a new foundation degree in Watersports Leisure Management. The degree was developed due to the job opportunities created by the popularity of England’s northern lakes. The course will focus on the business side of the industry, covering issues such as book-keeping, safety and the environment.
Salford is now one of only a handful of universities offering a course in Zoology, the study of animals and their biological processes. The degree features practical training and students are encouraged to take a placement year – for which no tuition fees are payable for new students – with a major Team awards company linked to a public health laboratory, wildlife trust or research organisation.
10 Maximising research – tackling issues Annual Report & Financial Statements
Maximising research – tackling issues
At Salford, we are renowned for carrying out excellent Model car to solve energy crisis research in multidisciplinary areas of study. Our academics have never been afraid of embracing real-world problems by With the pressure on to find alternatives to petrol and diesel utilising our highly-rated research capabilities to provide which add to global warming, a tiny model car prototype is practical solutions that make a positive difference. helping our scientists to develop life-sized hydrogen-fuelled cars. In September 2006 and for the second year running, The Sunday Times rated Salford as a Gold Standard of Excellence Professor Keith Ross and a team from the Institute for for its ‘elite’ research in the field of the Built Environment. The Materials Research, were awarded a £500,000 European ranking was based on the University’s Built & Human Commission grant in April to investigate ways to store Environment (BuHu) Research Institute’s 5* rating in both the hydrogen in vehicles. 1996 and 2001 Research Assessment Exercise (RAE). BuHu is the only built environment research institute to achieve this status – and the largest in its field in the UK. They developed the model to show a possible way of keeping the gas - which could take industry one step closer to manufacturing hydrogen cars. This consolidates our reputation for outstanding research capability. We are in the top third of universities for research and are one of only 32 to be awarded the highest possible Keith said: “Hydrogen is already known as a potentially safer, rating of 6* for aspects of our research. In addition to BuHu, more economical and more environmentally-friendly our Informatics Research Institute (IRIS) achieved this status. alternative to petrol-powered cars. A 6* rating is awarded when the majority of work in a research area assessed in the last two RAEs has been of “We will be co-ordinating international research over the next international importance. five years to solve the one remaining problem – how to store hydrogen on board a car. This represents the final piece of More generally, this year saw the culmination of a five year the jigsaw in the quest to manufacture eco-friendly cars.” effort during which the number of research active staff has increased by more than 50%, whilst maintaining our high quality level. During the past year our researchers have undertaken many high-profile research projects, with a particular focus on current and emergent real life issues.
Professor Keith Ross with his hydrogen powered car 11 Annual Report & Maximising research – tackling issues Financial Statements
Best foot forward for the MoD New development in the fight against super-bugs
Our researchers are helping the Ministry of Defence (MoD) to Earlier this year a team of Salford researchers invented a improve things for soldiers’ feet and backs – a project which unique coating to be used in the fight against antibiotic- could ultimately save their lives in combat situations. resistant super-bugs such as MRSA.
Scientists from the Institutes of Health & Social Care Research The team, headed by Professor David Sheel, devised a novel (IHSCR) and Materials Research (IMR) have worked with coating system which, when applied to a surface, forms a machines, computers and human volunteers to enhance the durable coating that kills bacteria within minutes. What’s army’s combat footwear and backpacks in order to improve more, the coating continues to destroy bacteria for a long infantry performance. period afterwards due to its ability to ‘regenerate’.
The results have recently been submitted to the MoD and Regeneration occurs when ultraviolet rays - present in sunlight University staff anticipate it won’t be too long before British - are used on the surface for a few hours to return the foot soldiers across the globe are benefiting from antibacterial effect. The coating will then continue to kill biomechanically proven boot and backpack designs. bacteria alighting on the surface.
The Institute of Materials Research’s Dr Moji Moatamedi led The coating is extremely durable despite being only a few tens the team investigating footwear performance. of nanometres thick. It also resists wear and tear which would compromise many other antibacterial coatings. “Our brief was to study how tread patterns – the intricate design on outer shoe soles – affect the performance of With recent publicity concerning MRSA and the ineffectiveness soldiers’ combat boots. The MoD gave us five different boot of many hospitals in maintaining regular cleaning practices, designs to compare and contrast. From that information, we this technology offers a simple solution. were able to recommend the most effective tread pattern.” David is now exploring how this technology can be spread. The team used machinery to simulate the human foot and He said: “This substance can be used in areas where biocidal measure how each boot design responded to skidding on soft surfaces are beneficial; such as hospitals, where it could help surfaces like mud, sand and snow. This information was then to make a real difference to patients.” translated into a 3D computer simulation.
Biomechanically proven boot 12 Annual Report & Maximising research – tackling issues Financial Statements
Parasite researchers visit ‘roof of the world’ Skin-to-skin contact affects babies’ futures
In May a team of Salford researchers visited Tibet to help the Our midwifery lecturer Mary Price received her doctorate in Chinese Government to save lives in semi-nomadic Tibetan August for research into cuddling. communities through field-work tracking the spread of the life-threatening parasite Echinococcus. Mary, who teaches at the School of Health Care Professions, spent five years studying mother and baby relationships The Biosciences Research Institute team discovered that the at Rochdale Infirmary to see what effect early physical parasite is widespread among people in the region known as contact has. the ‘roof of the world’. She found that there are huge benefits to be had by mothers The scientists investigated how Echinococcus is spread by making skin-to-skin contact with their babies – especially in infected dogs, livestock and small mammals to the human the hour just after birth. population. The parasite causes hydatid cysts which may form in the brain, bones, lungs or liver. It can lie dormant for up to She believes that without this initial contact a child’s whole 20 years, making it difficult to detect in areas which have poor future life could be affected. Her findings have been adopted access to modern medical facilities. by Rochdale Infirmary’s maternity unit and she hopes they will soon be spread to other hospitals across the country. The team are currently reporting their work to the Chinese Since the story has been released in the media, Mary has been Government which has made tackling the parasite a top in high demand, with articles published in national priority for health improvement in western China. newspapers and even as far away as Mumbai and Turkey; meaning that even more hospitals could adopt her findings.
At Salford, we are committed to furthering the
Mary Price and the importance of skin-to-skin contact 13 Annual Report & Maximising research – tackling issues Financial Statements
New game for Ordsall Hall
Visitors to Salford’s historic Ordsall Hall can now discover even more about the way life would have been in Tudor times, thanks to a new game from Salford designers.
The new game allows visitors to walk around a virtual model of the hall and examine objects. Each object is accompanied by information to help visitors gain a real appreciation of life in a Tudor manor house.
For the more anarchic visitors there is also a part of the game which allows people to run around the hall in the role of an archer, shooting targets and scoring points.
The team believe that this provides visitors with a more accessible and fun way of learning about Ordsall Hall’s exhibits - especially for the numerous school parties who go to the hall Ordsall Hall each year.
Programme Leader for the Master’s Programme in Creative Games, Mathias Fuchs, said: "Projects like this are part of a major growth industry known as ‘serious games’. They really help make museum exhibits more effective and more fun.”
14 Annual Report & Thinking globally – broadening horizons Financial Statements
Thinking globally – broadening horizons
At Salford we are commited to furthering the internationalisation Salford branches out to China of the University and encouraging everyone to ‘think internationally’ in all their activities. Whether it’s through Earlier this year Salford expanded its business activity to making the curriculum and our research more international, Chengdu, South West China. The University now develops and developing partnership arrangements with overseas institutions manages networks and partnerships in Chengdu to enhance or establishing a regional presence abroad, internationalisation its profile in teaching and applied research. It also supports is one of our major priorities. new initiatives and provides the University with regular news and updates about educational developments The past year has consolidated the work of our International in China. Strategy Committee, with a number of positive international developments within the University. The initiative – which is in partnership with Salford City Council – is running as part of the China-Britain Business Top quality for European exchanges Council’s Launchpad scheme, which helps British organisations do business in China. In April we received an internationally recognised award for the high quality of our European exchange programmes, one Mr Xu Dongsheng (Tiger) was appointed as Project Manager of only 12 in the UK and 38 across the whole of Europe. of the venture. Formerly Head of Foreign Affairs at the Office for British Higher Education Programmes and the Chinese The European Quality (E-Quality) Label recognises the Service Centre for Scholarly Exchange, Tiger will be responsible University’s excellent management and promotion of the for overseeing all of the University’s activity in China. Erasmus programme, the European Commission’s mobility programme for higher education students, teachers and institutions.
The E-Quality assessment panel named Salford as a ‘dynamic organisation’ for the administration and promotion of Erasmus. In particular, the ‘excellent materials’, ‘good use of ICT’ and the ‘daily message facility’ were commended.
In recognising the University’s award, David Hibler, Assistant Director of the UK Socrates-Erasmus Council, said: "The European E-Quality Label provides wider recognition of the work which universities undertake for Erasmus and European activities. The quality of the applications was high, and we hope that this award will contribute to raising the profile of the Erasmus programme."
Mr Xu Dongsheng (Tiger)
15 Annual Report & Financial Statements Thinking globally – broadening horizons
Salford welcomes Malaysian research dignitaries United nations
A host of dignitaries and higher education chiefs were at the Our inaugural Overseas Consultants’ Conference in March University in June for a major event at which top UK and helped to reinforce Salford’s commitment to students from Malaysian universities launched a new research collaboration outside the UK who choose to study here with us. initiative. Political figures and university vice-chancellors convened for the International Conference of the Malaysian International consultants from Bolivia, Bulgaria, China, Cyprus, Research Group (MRG), which this year was hosted by Salford. Hong Kong, India, Jordan, Malaysia, Nigeria and Turkey were MRG is a network of Malaysian researchers worldwide. invited for the five day event to learn the latest about student life and the University’s programmes in order that they can The event culminated in a ceremony, at which the University of offer advice to those around the world who want to come and Salford signed a memorandum of understanding with several study in the UK. Malaysian universities, pledging to collaborate on future academic research activity. The agreement is aimed at The University employs experienced advisors throughout the strengthening research ties between Salford and its world from Amman to Zhejiang to help students select the counterparts in Malaysia. most appropriate programme of study, apply for a visa and complete the application process. Malaysia’s Government is keen to develop the country as a regional educational research hub and the conference will Salford staff top the jet-set explore this potential. In addition, Brian Iddon, MP for Bolton South East, delivered an opening speech on the opportunities Salford came top of all UK universities in July for the number and challenges facing the UK and international academic of our academic staff who travel to European partner research communities. institutions to deliver Erasmus sponsored guest lectures. Figures from UK Socrates-Erasmus, the scheme which Vice-Chancellor Professor Michael Harloe, said: “We are encourages student and teacher travel, revealed that a total of delighted to host this event and to have been chosen as a 49 Salford academics took part in a teaching staff exchange preferred partner for research collaboration. This is recognition in 2003-04. of our world-class research standing and we look forward to working further with our Malaysian partners on this important The data included 146 higher education institutions active in and groundbreaking initiative.” Erasmus exchanges that year, of which 92 sent fewer than seven staff and 30% sent between eight and 19 staff. Exchanges are part of a proactive approach by the University to encourage both staff and students to develop an international outlook and dimension to their work.
Piera Gerrard, Head of the University’s International Relations Office, said: “We are delighted to be leading the way in this area with so many of our staff developing European links and travelling overseas. We are keen to encourage our new students to do the same - they won’t have to pay any tuition fees for the 12 months they work during a placement year abroad.” Conference of the Malaysian Research Group 16 Annual Report & Thinking globally – broadening horizons Financial Statements
Academic advises French Prime Minister Asia-Link
In May a Salford academic was invited to join a commission In March the School of Art & Design took part in the organised by the Prime Minister of France to reform the prestigious international design management symposium, D2B university system. in Shanghai. The conference brought together design management academics and professionals from across the world. Professor John Keiger was appointed by the Prime Minister, Dominique de Villepin, to help counter the high levels of unemployment amongst the French youth. This is a major Our involvement was the culmination of an Asia-Link issue in France and has recently led to protests and disorder on Programme led by Salford in which the University worked with the streets of Paris. Copenhagen Business School, Denmark; Politecnico di Milano, Italy; University of Stockholm, Sweden; Tsinghua University, P.R. China; Shanghai Jiao Tong University, P.R. China; Harbin John was appointed because of his in-depth knowledge of the Institute of Technology, P.R. China; King Mongkut’s Institute of British and French education systems. He was the only Technology, Ladkrabang, Thailand – amongst the top foreigner on the group which is made up of vice-chancellors, universities in their respective countries. industrialists, academics and a journalist. The commission interviewed student groups, trade unions, industrialists and civil servants before submitting a report in June. The Europe-Asia Design Management Network was a unique two year EU funded project focussing on curriculum development of postgraduate design management programmes within EU and Asia; and to foster sustainable Mission to China educational links between EU, Chinese and Thai higher education institutions. As well as the D2B symposium, our In May Vice-Chancellor Professor Michael Harloe accompanied involvement included the reciprocal exchange of academic Minister for Higher Education Bill Rammell MP to China. The staff in order to assess teaching and develop new Masters delegation, which also included the Vice-Chancellors of taught modules in International Design Management. Nottingham and Liverpool Universities, visited Beijing and Shanghai, as well as Hong Kong, where the Minister signed an agreement pledging closer cooperation with Hong Kong universities. The trip will be followed up in November, when Professor Harloe and Pro-Vice-Chancellor for Teaching and Learning, Jane Hanstock have been invited to take part in a mission to Hong Kong strengthening university-to- university links.
17 Annual Report & Financial Statements Encouraging recognition – celebrating success
Encouraging recognition – celebrating success
‘Dream come true’ for fashion student Students scoop top prize at TV awards
Salford student Laura Kay has designs on a long career in A group of Salford media students was awarded a top prize at fashion after scooping a top national award. the prestigious annual Royal Television Society Awards at the Midland Hotel in Manchester in November. Laura, from Burnley, took a step closer to fulfilling her dream of becoming a top designer when she was crowned Clothes The successful students – all budding filmmakers, presenters Show Live Young Designer of the Year in December. Asked to and journalists – joined the ranks of the BBC’s Gordon Burns design an outfit inspired by the glitz and glamour of Las as they won Best Regional Current Affairs Programme and Vegas, Laura beat off competition from 300 other entrants Best Newcomer Award. and was in the line-up of just ten wannabe designer finalists. Master’s degree documentary, Displaced, a film about Russian Her victory means she will have a head start to a career in immigrants living in Manchester, beat the BBC into second fashion design, with £2,000 prize money and a two-week place by winning Best Regional Current Affairs Programme. internship with leading British designer Julien MacDonald. The Society broke with tradition for Best Newcomer by awarding joint first place to all three Channel M nominations - Public servant success Laura Fogg (reporter, Channel M News), Gerard McLaughlin (presenter, Interference & Reel North) and the Reel North Production Crew 2004/05. The latter two nominations Complementary therapist Peter Mackereth won the originate from Salford University, whilst Laura Fogg accepted Guardian newspaper’s Public Servant of the Year 2005 the award on behalf of Channel M News. award in November.
Peter, who splits his work between the School of Community, Health Sciences & Social Care, at Salford, and Manchester’s Christie Hospital, scooped the prestigious national honour at an awards ceremony.
The prize was for his work at the Christie Hospital, where he has single-handedly transformed the complementary therapy service for cancer patients.
Peter said: “I’m totally bowled over and honoured. After beavering away for years, this award is the most wonderful affirmation that we’re providing something patients want, value and see as part of their treatment at the Christie.”
The Royal Television Society Awards
18 Annual Report & Encouraging recognition – celebrating success Financial Statements
Young Investigator brings WWII documents to life Julie’s design for life
A Salford scientist was awarded the title of Outstanding Young When Julie Trueman decided to change careers from doctor to Investigator in January for his groundbreaking work providing interior designer she could never have guessed that success in instant access to digitally restored archives - including those her new field would come so quickly. from Second World War Nazi concentration camps. But in May, the Salford interior design student found out that The Informatics Research Institute’s Dr Apostolos she’d won the prestigious RSA (Royal Society for the Antonacopoulos created digital technology able to analyse Encouragement of Arts, Manufactures and Commerce) award paperwork from the Polish Stutthof concentration camp, for best Design for Patient Safety. extract historical data and create a ‘virtual archive’ – so archivists can access information at the click of a button. The Julie was presented with a £3,000 cheque to spend on future project is the outcome of EU funding. projects. What’s more, she also had the bed that she created as part of an innovative new hospital ward shown on the front Apostolos is the first UK researcher to have won the title. He cover of the April edition of the RSA journal. said: “Previously, archivists have had to search through mountains of paperwork to retrieve information. Our technology allows them to retrieve this information Sexual health ‘mystery shoppers’ win NHS award electronically in a fraction of the time.”
A ‘mystery shopper’ initiative in which 19 young people went Stutthof was one of the few concentration camps whose undercover to put sexual health services in Tameside and paper records were not destroyed by the SS. The number of Glossop to the test won a Greater Manchester NHS Award victims is estimated at 85,000. in April.
The University of Salford spin-out company, Contraception Education, was the sexual health trainer for the Tameside and Glossop Mystery Shopper Project. Organisers were presented with a finalist award in the Stop, Look and Listen category at a ceremony at the New Century Hall, Manchester.
The ‘mystery shoppers’, a team of 19 young people, were trained in sexual health by the University’s nursing lecturer, Barbara Hastings-Asatourian. They then visited a series of drop-in centres in the area – acting as ordinary members of the public in order to rate the service they received.
The young people’s findings resulted in seven key recommendations for the improvement in services in the area. This report, based on the mystery shoppers’ experiences and Dr Apostolos Antonacopoulos awarded the title of observations, has been incorporated into NHS plans. Outstanding Young Investigator
19 Annual Report & Encouraging recognition – celebrating success Financial Statements
Sibling success for annual fund World Cup footballer graduates from Salford
Our 2006 Annual Fund student callers pledged a whopping It might not have equalled the pressure of having over a billion £60,396 for the University in March – and brother and sister fans cheering him on, but for former Chinese international Roy and Sonia Chohan drummed up record-breaking amounts. footballer Maozhen Su, receiving his MSc in Management in July rated as one of his most memorable achievements. Together, the Chohans raised £7,200 worth of pledges, and were each awarded Caller of the Week during the six week And he’s now hoping his new-found skills will help him telephone campaign to raise cash pledges from ex-students. become the new Alex Ferguson.
The funds raised by the team – including the Chohans – is Maozhen had an illustrious playing career, making over 50 already benefitting students and staff by contributing towards appearances for his country and playing in China’s first ever scholarships and bursaries; student clubs; buildings and World Cup finals game in 2002. He spent most of his career facilities; and academic research, among other things. playing in China but had trials with Manchester United.
His familiarity with the city and recommendations from friends led him to start a Graduate Diploma in Management and English in 2004 after injuries forced him to retire from football.
He said: “I was so happy at Salford that I thought I should stay for my Master’s. My next step is to use my new management skills to become the greatest coach in China. My target is to be as good as Sir Alex Ferguson, Jose Mourinho and Arsene Wenger.”
The Chohans raised £7,200 worth of pledges
Former Chinese international footballer Maozhen Su, 20 Annual Report & Encouraging recognition – celebrating success Financial Statements
Financial Statements for the year ended 31st July 2004
Salford student launches glossy African magazine
A journalism student from the University of Salford launched the first ever African celebrity magazine in the UK in August.
Student editor Gitau wa Njenga was been backed by the University to develop JAMBO magazine – a 68 page full colour glossy featuring African content including news and features on celebrity gossip, fashion, lifestyle and health.
The first run of 15,000 issues were be distributed in over 200 outlets across the UK, mainland Europe, sub-saharan Africa and America for the first issue. The launch is being supported by extensive investment and circulation is expected to reach 25,000 per month after the first quarter.
Gitau said: “JAMBO will put African celebrities on the international map through first-class photo-journalism. Our aim is to reach diverse African communities around the globe who seek an intelligent read that gives them a broader Front cover of the first issue of JAMBO perspective on the world.”
Student editor Gitau wa Njenga 21 Annual Report & Statistics Financial Statements
Statistics
Student numbers by mode 2005/06 2004/05
Full Part Total Full Part Total time time time time Undergraduate 12,915 3,235 16,150 12,854 2,982 15,836 Postgraduate – taught 1,145 2,311 3,456 1,105 2,540 3,645 Postgraduate – research 318 260 578 309 309 618 Total 14,378 5,806 20,184 14,268 5,831 20,099
Full-time students by domicile 2005/06 2004/05
Home O/seas Total Home O/seas Total Undergraduate 12,222 693 12,915 12,028 826 12,854 Postgraduate – taught 699 446 1,145 565 540 1,105 Postgraduate – research 159 159 318 150 159 309 Total 13,080 1,298 14,378 12,743 1,525 14,268
Male:Female student ratio among all full-time undergraduates and postgraduates
2005/06 2004/05 Sex Male 48% 48% Female 53% 53%
Known destinations of UK/EU graduates
Destination2005 Leavers 2004 Leavers
Entered employment 70.5% 71.3% Employment and study 12.5% 12.7% Further study or training 12.5% 10.2% Believed unemployed 4.5% 5.8%
22 Annual Report & Financial Statements Financial Statements
Financial Statements for the year ended 31st July 2006
23 Annual Report & Membership of the Council 2005 - 06 Financial Statements
Membership of the Council 2005-06
Ex-officio Members Appointed Members (Senate) Chancellor Professor S Donnelly Sir Martin Harris Mrs M Butler Pro-Chancellor Professor S Donnelly Mr R Batters Professor B Longhurst Vice-Chancellor Professor C A Roberts Professor M Harloe Professor D Storey Pro-Vice-Chancellors Professor R Towell Professor P S Barrett Co-opted Members Mr M Garrity Members co-opted by the Council Miss H J Hanstock Mr T Britten Professor J A Powell Ms L Clarke Mr A Gibson (Chair of Council) Mr J Greenough (Chair of Finance Committee) Representative Members Mrs J Procter (Chair of Personnel Committee) Salford City Council Mr N Renfrew Councillor W B Pennington Mr K Simmons (Chair of Audit Committee) Association of Greater Manchester Authorities Mr J C Willis
Councillor D Lancaster One member of the Academic Related Staff of the University Mrs C Hughes
Appointed Members (Court) One member of the Non-Academic Staff of the University not paid on academic related scales Dr N Chamberlain Miss J Yates Ms F Goodey Mr D C Longley Two members of the Students’ Union Dr C Tyler Ms T Robert Mr C Wells (Vice-Chair of Council and Chair of Estates Ms S Winter Committee)
24 Financial Review Annual Report & Financial Statements
Financial Review
Scope of the Financial Statements 6. The underlying result for the year, a Surplus of £1.3m 1 The Financial Statements comprise the consolidated before Arts & Media development costs and exceptional (Group) results of the University of Salford (University) and charges, represents a sound performance. Exceptional its subsidiary undertakings. The Group structure is set out charges of £1.6m related to the impairment costs and on page 26. demolition of a number of redundant buildings. The Group’s result assessed on the basis of historical cost, that Income and Expenditure Account is excluding depreciation charges which result from 2 The Group Income and Expenditure for the years to 31 property valuations, was a deficit of £2.4m (2005: surplus July are summarised as follows:- £1.5m). The result has reduced income and expenditure Restated reserves excluding pension liabilities to £39.3m which 2005-06 2004-05 exceeds the net pension liability of £26.3m leaving net £m £m reserves of £13m. Income 146.8 141.4 Expenditure – Recurrent 145.5 141.5 Balance Sheet 7. On 31 July 2006 the University’s land and buildings were Surplus/(Deficit) before Arts & re-valued by Dunlop Haywards, Chartered Surveyors. These Media Development Costs 1.3 (0.1) assets were valued at £152.6m compared to an original Net Book Value of £125.3m and the Revaluation Reserve Expenditure – Arts & Media was therefore increased by £27.3m. Development Costs 3.9 - 8. The Group made capital investments during the year of (Deficit) before Exceptional £12.9m (2005:£28.8m). Of this amount some £8.3m was Property Costs and Company invested in buildings, including the completion of a new Disposals (2.6) (0.1) Health Faculty Building, which was opened in October 2005, and a continuing programme of major refurbishments. The University’s Peel Park Campus and 3 The University’s income in 2005-06 rose by £5.4m (3.8%) Allerton Building have been upgraded and the Meadow compared with the previous year. The main increases were Road Campus was vacated and demolished. Some £4.6m in Funding Council grants and education contracts with was spent on major equipment purchases. the National Health Service. 9. Of the capital investment £4.2m was financed through 4 Recurrent Expenditure increased by £4.0m (2.8%). Staffing capital grants received and the remainder was financed costs, excluding the cost of early retirements and voluntary from internal resources pending the draw down of loan severance, rose by £2.8m (3.5%) reflecting annual pay finance and the generation of capital receipts from the increases and internal promotions. The recurrent pay bill disposal of some land and student residences. The Group’s represents some 58.4% of expenditure which is slightly net liquid funds reduced temporarily by £12.8m to £4.2m. less than the average for the sector. There was a fall of 10. The University’s long term borrowings are comparatively £0.8m in retirement and severance costs. Other Operating low within the Higher Education Sector and the University Expenses increased by £1.0m (2.1%). plans to finance further capital investment through 5 There was, however, expenditure of £3.9m relating to the borrowing. The University has facilities with Barclays Bank development costs on a proposed Arts and Media Centre. to borrow £6m for the Law School and £50m to finance The scheme is currently under review due to a need to the revised Arts and Media Centre in due course. control costs. In the light of this, capitalisation of expenditure is not currently considered appropriate.
25 Annual Report & Financial Review Financial Statements Financial Review
Student Numbers Employee Involvement 11. The numbers of students attending the University in 2005- 14. The University places considerable value on the 06 are detailed in the Statistics section of the Annual involvement of its employees and on good communication Report. with them. The University publishes an official newsletter which is made available to all staff and separate supplements are published when the need arises. Staff are Professional Advisors encouraged to participate in formal and informal consultation at University, Faculty and School level, 12. Bankers Barclays Bank plc sometimes through the membership of formal Internal Auditors Universities Internal Audit Committees. Consortium External Auditors Grant Thornton UK LLP Investment Managers Royal London Asset Management Conclusion Tilney Fund Management 15. The Council is satisfied that the Group has adequate resources to continue in operation for the foreseeable Employment of Disabled Persons future and, for this reason, the going concern basis 13. Applications for employment by disabled persons are continues to be adopted in the preparation of the Financial always fully considered, bearing in mind the aptitudes of Statements. The University intends to maintain its sound the applicant concerned. In the event of existing underlying financial position through sustained income employees becoming disabled every effort is made to generation and affordable investment in new ensure that their employment with the University continues developments. and that appropriate training is arranged. It is the policy of Professor M H Harloe the University that the training, career development and Vice-Chancellor promotion of disabled persons should, as far as possible, 12 December 2006 be identical with that of other employees.
Group Structure The principal subsidiaries of the University at 31 July 2006 are set out below:-
University of Salford
University of Salford University of Salford Skyscope Limited (Health Services Training) Limited Enterprises Limited (Property Development (Training) (Business Development, Consultancy - Dormant) and Investment Management)
Crescent Purchasing Limited Salford Software Limited (Purchasing Services) (Software Marketing) 26 Annual Report & Statement of Primary Responsibilities Financial Statements
Statement of Primary Responsibilities
The Council is the executive governing body responsible for 5. Estate management the finance, property, investments and general business of the (a) Approving and keeping under review an estates strategy University and for setting the general strategic direction of the that identifies the property and space requirements needed institution. Its primary responsibilities may be summarised as to fulfil the objectives of the University’s strategic plan. follows: - (b) Providing for a planned programme of maintenance for the 1. Strategic planning University’s estate. (a) Considering and approving the mission and strategic plans (c) Considering and approving all capital projects and all of the institution, longer-term business plans, key disposals of land and property. performance indicators and annual budgets, and ensuring 6. Human resource management that these meet the interests of stakeholders. (a) Approving the University’s staffing strategy and policies, 2. Monitoring effectiveness and performance including remuneration policy. (a) Ensuring the establishment and monitoring of systems of (b) Ensuring the University has clear procedures for handling control and accountability, including financial and internal grievances and for managing conflicts of interest. operational controls and risk assessment. (c) Appointing the Vice-Chancellor and the Registrar and (b) Monitoring institutional performance against plans and Secretary and setting the terms and conditions for these approved key performance indicators which, wherever posts. possible and appropriate, are benchmarked against other institutions. 7. Equality and diversity (c) Monitoring its own effectiveness as a governing body and (a) Ensuring that the University has non-discriminatory systems reporting thereon. in place to provide equality of opportunity for staff and students. (d) Putting in place suitable arrangements for monitoring the performance of the Vice-Chancellor and Registrar and (b) Approving the University’s access agreement with the Secretary. Office for Fair Access and monitoring institutional performance against widening participation targets set 3. Finance therein. (a) Ensuring the solvency of the University and safeguarding its 8. Health and safety assets. (a) Oversight of the University’s arrangements for ensuring the (b) Approving the financial strategy and the overall annual health and safety of staff, students and other individuals budget. while they are on the University’s premises and in other (c) Receiving and approving annual accounts. places where they may be affected by its operations. 4. Audit (b) Ensuring that the institution has a written statement of policy on health and safety. (a) Directing and overseeing the University’s arrangements for internal and external audit. 9. Students’ Union (a) Ensuring that the Students’ Union operates in a fair and democratic manner and is accountable for its finances.
27 Annual Report & Corporate Governance Statement Financial Statements
Corporate Governance Statement
1. The University is committed to best practice in all aspects of year 2005-06 is provided on page 24. None of the lay corporate governance and seeks, in particular, to apply the members receive any payment, apart from the principles set out in Part 1 of the Committee of University reimbursement of expenses, for the work which they do for Chairmen (CUC) Guide for Members of Higher Education the University. Governing Bodies in the UK published in November 2004. (b) The Senate – is the academic authority of the University The purpose of this summary is to help the reader of the and draws its membership from the academic staff and the financial statements understand how the principles have students of the institution. Its role is to direct and regulate been applied. the teaching and research work of the University. (c) The Court – is a large, mainly formal body (somewhat akin 2. In the opinion of the Council, the University currently to the shareholders’ meeting of a large public company). It complies with all the principles set out in the Guide with offers a means whereby the wider interests served by the one exception. Current University of Salford practice University can be associated with the institution, and diverges from CUC guidance in relation to the size of the provides a public forum where members of the Court can Council. The University Council has reviewed this matter raise any matters about the University. The Court normally and considers that the present size of membership at meets once a year to receive the Annual Report and Salford (37) is appropriate for an institution of the size and Financial Statements of the University. In addition, major with the range of stakeholders and activities that this changes to the constitution of the University require the University has. To ensure that the University has access to approval of the Court before they can be submitted to the the range of knowledge and skills that external members Privy Council. A majority of the members of the Court must bring, that the Council retains a lay majority, and that be from outside the University, representing the local internal stakeholder groups: management, staff and community and other designated bodies with an interest in students are adequately represented necessitates a Council the work of the University, but the membership also membership of the present order. includes representatives of the staff of the University (both academic and non-academic) and the student body. 3. The University is an independent corporation, whose legal status derives from a Royal Charter originally granted in 5. The principal academic and administrative officer of the 1967. Its objects, powers and framework of governance are University is the Vice-Chancellor who has a general set out in the Charter and its supporting statutes, the responsibility to the Council for maintaining and promoting latest version of which was approved by the Privy Council the efficiency and good order of the University. Under the in 2004. terms of the Financial Memorandum between the University and the Higher Education Funding Council for England, the Vice-Chancellor is the Designated Officer of the University 4. The Charter and Statutes require the University to have and in that capacity can be summoned to appear before the three separate bodies, each with clearly defined functions Public Accounts Committee of the House of Commons. and responsibilities, to oversee and manage its activities, as follows:- (a) The Council – is the executive governing body, responsible 6. Although the Council meets at least four times each for the finance, property, investments and general business academic year, much of its detailed work is initially handled of the University, and for setting the general strategic by committees, in particular the Finance Committee, the direction. A statement of the primary responsibilities of the Personnel Committee, the Estates Committee, the University Council is provided on page 30. It has a majority of Services Committee, the Nominations Committee, the members from outside the University, described as lay Remuneration Committee and the Audit Committee. The members, from whom its Chairman and Vice-Chairman decisions and recommendations of these committees are must be drawn. A full statement of the membership for the reported to the Council. These committees are formally
28 Annual Report & Corporate Governance Statement Financial Statements
constituted with written terms of reference and specified 10. The University maintains a register of interests of members membership, including a significant proportion of lay of the Council and Senior Officers, which may be members (from whom the Chairman is selected). The consulted by arrangement with the Registrar and Finance Committee inter alia recommends to the Council Secretary. The Statutes of the University specify that the the University’s annual revenue and capital budget and Registrar and Secretary should act as Secretary of the monitors performance in relation to the approved budgets. Council. Any enquiries about the constitution and The Remuneration Committee determines the remuneration governance of the University should be addressed to the of the Vice-Chancellor and the Registrar and Secretary and Registrar and Secretary. sets the remuneration policy for senior staff.
7. The Audit Committee meets at least three times a year, with the University’s external and internal auditors in attendance. The Committee considers detailed reports together with recommendations for the improvement of the University’s systems of internal control and management’s responses and implementation plans. It also receives and considers reports from the Higher Education Funding Council for England as they affect the University’s business and monitors adherence to the regulatory requirements. Whilst Senior Officers attend meetings of the Audit Committee as necessary, they are not members of the Committee and the Committee has power to meet the external auditors or internal auditors for independent discussions.
8. As Principal Officer of the University, the Vice-Chancellor exercises considerable influence upon the development of strategy, the identification and planning of new developments and the shaping of the ethos of the institution. The Pro-Vice-Chancellors and the Senior Officers who comprise the Executive Group all contribute in various ways to this aspect of the institution, but the ultimate responsibility for what is done rests with the Council. The Executive Group and the Audit Committee receive regular reports from the internal auditors, which include recommendations for improvement.
9. The University has embarked on a comprehensive review of its committee and management structures and this work will continue in 2006-07 with a view to introducing revised arrangements in 2007-08.
29 Annual Report & Statement of the Council’s Responsibilities and Internal Control Financial Statements
Statement of the Council’s Responsibilities and Internal Control
1. As the Council of University of Salford, we have 4. The Council takes reasonable steps to:- responsibility for maintaining a sound system of internal (a) ensure that funds from the Higher Education Funding control that supports the achievement of policies, aims and Council for England are used only for the purposes for objectives, while safeguarding the public and other funds which they have been given and in accordance with the and assets for which we are responsible, in accordance with Financial Memorandum with the Higher Education Funding the responsibilities assigned to the Council in the Charter Council for England and any other conditions which the and Statutes and the Financial Memorandum with the Higher Education Funding Council for England may from Higher Education Funding Council for England. time to time prescribe; (b) ensure that there are appropriate financial and 2. The Council is responsible for keeping proper accounting management controls in place to safeguard public funds records which disclose with reasonable accuracy at any time and funds from other sources; the financial position of the Group and to enable it to (c) safeguard the assets of the Group and prevent and ensure that the Financial Statements are prepared in detect fraud; accordance with the University’s Charter of Incorporation, (d) secure the economical, efficient and effective management the Statement of Recommended Practice on Accounting in of the University’s resources and expenditure. Further and Higher Education Institutions and other relevant Accounting Standards. In addition, within the terms and conditions of the Financial Memorandum agreed between 5. The key elements of the Group’s system of internal financial the Higher Education Funding Council for England and the controls, which is designed to discharge the responsibilities Council of the University, the Council, through its set out above include the following: designated officer, the Vice-Chancellor, is required to (a) clear definitions of the responsibilities of, and the authority prepare Financial Statements for each financial year which delegated to, heads of academic and administrative give a true and fair view of the state of affairs of the departments; University and Group and of the surplus or deficit, and cash (b) a medium or short term planning process supplemented by flows for that year. annual budgets; (c) regular reviews of academic and support service 3. In causing the Financial Statements to be prepared the performance; Council ensures that:- (d) clearly defined and formalised requirements for approval (a) suitable accounting policies have been selected and applied and control of expenditure, with capital expenditure being consistently; subject to formal detailed appraisal and review according (b) judgements and estimates have been made that are to approval levels set by the University Council; reasonable and prudent; (e) comprehensive Financial Regulations, detailing financial (c) applicable Accounting Standards have been followed, controls and procedures, approved by the Finance subject to any material departures disclosed and explained Committee; in the Financial Statements; (d) Financial Statements have been prepared on the going 6. The system of internal control is designed to manage rather concern basis, unless it is inappropriate to presume that the than eliminate the risk of failure to achieve policies, aims Group will continue in operation. The Council is satisfied and objectives. It can therefore only provide reasonable and that it has adequate resources to continue in operation for not absolute assurance of effectiveness. the foreseeable future: for this reason the going concern basis continues to be adopted in the preparation of the Financial Statements.
30 Statement of the Council’s Responsibilities and Internal Control Annual Report & Financial Statements
7. The system of internal control is based on an ongoing 11. The University’s internal audit service is provided by process designed to identify the principal risks to the Universities Internal Audit Consortium (UNIAC) which achievement of policies, aims and objectives; to evaluate the operates to standards defined in the Higher Education nature and extent of those risks; and to manage them Funding Council for England Audit Code of Practice and efficiently and economically. These procedures have been in which was last reviewed for effectiveness by the Higher operation throughout the year ended 31 July 2006. Education Funding Council for England Audit Service in May 2002. The internal auditors submit regular reports which include the head of internal audit’s independent 8. We have undertaken the following actions to embed our opinion on the adequacy and effectiveness of the system risk management strategy: - of internal control, together with recommendations for (a) Held a risk management workshop for senior staff to improvement. review the institution’s objectives and risks, and determine a control strategy for each of the significant risks. 12. During the year the University has changed its external (b) Charged the University’s Senior Management Team with auditors from KPMG LLP to Grant Thornton UK LLP and overseeing the management of risk. from 1 August 2006 KPMG LLP will take over as internal (c) Requested the Audit Committee to provide advice on the auditors from UNIAC. effectiveness of risk management. (d) Requested that the internal auditors adapt their audit 13. Our review of the effectiveness of the system of internal planning arrangements, methodology and approach, so control is informed by the work of the internal auditors that the audit conforms to the latest professional standards and the senior managers within the University who have reflecting the adoption of risk management. responsibility for the development and maintenance of the internal control framework and by comments made 9. We have ensured that our meeting calendar and agendas by the external auditors in their management letter and enable risk management and internal control to be other reports. considered on a regular basis during the year. Risk management has been incorporated more fully into the corporate planning and decision making processes of the institution. Mr A Gibson Chairman 12 December 2006 10. We receive periodic reports from the Audit Committee concerning internal control, and we require regular reports from managers on the steps they are taking to manage risks in their areas of responsibility, including progress reports on key projects.
31 Annual Report & Financial Statements Report of the Independent Auditors to the Council of the University of Salford
Report of the Independent Auditors to the Council of the University of Salford
We have audited the financial statements of the University of applied in accordance with the financial memorandum and Salford for the year ended 31 July 2006 which comprise the any other terms and conditions attached thereto. income and expenditure account, the statement of historical We also report to you our opinion as to whether the cost surpluses and deficits, the statement of total recognised information given in the Financial Review is consistent with the gains and losses, the balance sheets, the cash flow statement, financial statements. We also report to you if, in our opinion, principal accounting polices and notes 1 to 40 which have the University has not kept proper accounting records, if we been prepared under the historical cost convention (as have not received all the information and explanations we modified by the revaluation of certain fixed assets) and the require for our audit. accounting policies set out in the statement of principal We read the Financial Review and the Corporation accounting policies. Governance Statement and consider the implications for our This report is made solely to the Council as a body. Our audit report if we become aware of any apparent misstatement work has been undertaken so that we might state to the within it. Our responsibilities do not extend to any Council those matters we are required to state to them in an other information. auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the University and the Council as a body, Basis of audit opinion for our audit work, for this report, or for the opinions we have formed. We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Respective responsibilities of the council Practices Board and the HEFCE Code of Practice. An audit and Auditors includes examination on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It As described in the statement of the Council's responsibilities also includes an assessment of the significant estimates and and internal control, the Council is responsible for the judgements made by the University's Council in the preparation of financial statements in accordance with the preparation of the financial statements, and of whether the Accounts Direction issued by the Higher Education Funding accounting policies are appropriate to the University's Council for England, the Statement of Recommended Practice circumstances, consistently applied and adequately disclosed. - Accounting for Further and Higher Education, applicable law, and United Kingdom Accounting Standards. Our responsibility We planned and performed our audit so as to obtain all the is to audit the financial statements in accordance with relevant information and explanations which we considered necessary legal and regulatory requirements and International Standards in order to provide us with sufficient evidence to give on Auditing (UK and Ireland). reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or any We report to you our opinion as to whether the financial other irregularity or error. In forming our opinion we also statements give a true and fair view and are properly prepared evaluated the overall adequacy of the presentation of in accordance with the Statement of Recommended Practice- information in the financial statements. Accounting for Further and Higher Education. We also report to you whether in our opinion, monies expended out of funds from whatever source administered by the University for specific purposes were properly applied for those purposes and where relevant managed in accordance with appropriate legislation and whether monies expended out of funds provided by the Higher Education Funding Council were
32 Annual Report & Report of the Independent Auditors to the Council of the University of Salford Financial Statements
Opinion In our opinion:
• The financial statements give a true and fair view of the state of affairs of the University of Salford and the group as at 31 July 2006, and of the deficit of income over expenditure of the group for the year then ended; and the statements have been properly prepared in accordance with the Statement of Recommended Practice-Accounting for Further and Higher Education; the information given in the Financial Review is consistent with the financial statements
• In all material respects, income from the Higher Education Funding Council for England and income for specific purposes and from other restricted funds administered by the institution have been applied only for the purposes for which they were received.
• In all material respects, funds have been applied in accordance with the University's Statutes and where appropriate in accordance with the financial memorandum with the Higher Education Funding Council for England.
Grant Thornton UK LLP Registered Auditors Chartered Accountants Manchester 12 December 2006
33 Annual Report & Consolidated Income and Expenditure Account Financial Statements
Consolidated Income and Expenditure Account for the Year Ended 31 July 2006
Note Before Exceptional Total Restated Exceptional Items 2005-06 2004-05 Items Income £’000 £’000 £’000 £’000 Funding Council Grants 1 57,929 57,929 53,337 Tuition Fees and Education Contracts 2 52,307 52,307 49,526 Research Grants and Contracts 3 7,456 7,456 9,164 Other Income 4 28,448 28,448 28,122 Endowment and Investment Income 5 612 612 1,243 Total Income 146,752 - 146,752 141,392
Expenditure Staff Costs 6 86,351 86,351 84,308 Other Operating Expenses 7 49,011 3,845 52,856 47,991 Depreciation 8 8,210 8,210 7,542 Interest Payable 9 1,926 1,926 1,609 Total Expenditure 10 145,498 3,845 149,343 141,450
Deficit Before Exceptional Items, Tax and Minority Interest 1,254 (3,845) (2,591) (58)
Share of operating surplus in associated undertakings 16 - 16 -
Deficit on Continuing Operations After Depreciation of Fixed Assets at Valuation and Before Exceptional Items and Taxation 1,270 (3,845) (2,575) (58)
Exceptional Items 11 - (1,610) (1,610) (4)
Deficit on Continuing Operations After Depreciation of Fixed Assets at Valuation and Disposal of Assets but before Taxation and Minority Interests 1,270 (5,455) (4,185) (62)
Taxation 12 - - - -
- Equity Minority Interests - - (1)
Deficit on Continuing Operations After Depreciation of Fixed Assets at Valuation, Disposal of Assets, Taxation and Minority Interests 1,270 (5,455) (4,185) (63)
Transfer from Accumulated Income within Specific Endowments 25 63 - 63 215
(Deficit)/Surplus for the Year Retained within General Reserves 27 1,333 (5,455) (4,122) 152
The results for the year ended 31 July 2005 have been restated to reflect the full implementation of FRS17 (See Note 13).
34 Annual Report & Consolidated Statements Financial Statements
Consolidated Statement of Historical Cost Surpluses and Deficits for the Year Ended 31 July 2006 Restated Note 2005-06 2004-05 £’000 £’000 Deficit on Continuing Operations before Taxation and Minority Interests (4,185) (62) Difference between Historical Cost Depreciation and the Actual Charge for the Year calculated on the Revalued Amount 26 1,267 1,394 Release from Revaluation reserve relating to disposals and demolitions 26 503 - Historical Cost (Deficit)/Surplus for the Year before Taxation and Minority Interests (2,415) 1,332 Historical Cost (Deficit)/Surplus for the Year after Taxation, Exceptional Items , Minority Interests and Transfers in Respect of Specific Endowments (2,352) 1,546
Consolidated Statement of Total Recognised Gains and Losses for the Year Ended 31 July 2006 Restated Note 2005-06 2004-05 £’000 £’000 Deficit on Continuing Operations after Depreciation of Fixed Assets at Valuation, Disposal of Assets and Taxation before Minority Interests (4,185) (62) Endowment Interest 25 35 44 Endowment Donations 25 49 122 Revaluation of Property 26 27,322 - Disposal of SUBEL Minority Interest 11 - (45) Actuarial Gain/(Loss) Recognised on the Pension Schemes 38(b) 47 (2,187) Total Recognised Gains/(Losses) for the Year 23,268 (2,128) Prior Year Adjustment 13 (16,375) - Total Recognised Gains/(Losses) for the Year since the last Financial Statements 6,893 (2,128)
Reconciliation Opening Reserves, Endowments and Minority Interests as Originally Reported 70,683 69,995 Less Prior Year Adjustment 13 (16,375) (13,559) Restated Reserves, Endowments & Minority Interests 54,308 56,436 Total Recognised Gains/(Losses) for the Year 23,268 (2,128) Closing Reserves, Endowments and Minority Interests 77,576 54,308
35 Annual Report & Financial Statements Consolidated Balance Sheet
Consolidated Balance Sheet as at 31 July 2006
Restated Note 2006 2005 £’000 £’000 Fixed Assets Tangible Assets 14 162,520 132,119 Investments 15 80 58 162,600 132,177 Endowment Asset Investments 16 838 817 Current Assets Stock 17 183 124 Debtors 18 12,001 12,964 Investments 19 3,909 15,843 Cash at Bank and in Hand 306 1,219 16,399 30,150 Creditors: Amounts Falling Due Within One Year 20 (24,635) (29,876) Net Current Liabilities/Assets (8,236) 274 Total Assets Less Current Liabilities 155,202 133,268 Creditors: Amounts Falling Due After More Than One Year 21 (21,103) (22,953) Provisions for Liabilities 23 (621) (1,989) Net Assets Excluding Net Pension Liability 133,478 108,326 Net Pension Liability 38(d) (26,288) (25,415) Net Assets Including Net Pension Liability 107,190 82,911
Deferred Capital Grants 24 29,614 28,603 Specific Endowments 25 838 817 Reserves Revaluation Reserve 26 63,716 38,164 Income and Expenditure Reserve 27 39,310 40,742 Pension Reserve 28 (26,288) (25,415) Total Funds 107,190 82,911
The Financial Statements on pages 34 to 65 were approved by the Council on 12 December 2006 and signed on its behalf by:- Professor M Harloe Vice-Chancellor Mr J Greenough FCA, CPFA Chairman of Finance Committee Mr R Corner CPFA Director of Finance
36 University BalanceUniversity Sheet Balance Sheet Annual Report & Financial Statements
University Balance Sheet as at 31 July 2006
Restated Note 2006 2005 £’000 £’000 Fixed Assets Tangible Assets 14 162,509 132,068 Investments 15 2 2 162,511 132,070 Endowment Asset Investments 16 838 817 Current Assets Stock 17 131 124 Debtors 18 9,170 11,039 Investments 19 3,909 15,843 Cash at Bank and in Hand 219 1,084 13,429 28,090 Creditors: Amounts Falling Due Within One Year 20 (22,571) (28,545) Net Current Liabilities (9,142) (455) Total Assets Less Current Liabilities 154,207 132,432 Creditors: Amounts Falling Due After More Than One Year 21 (21,103) (22,828) Provisions for Liabilities and Charges 23 (621) (1,989) Net Assets Excluding Net Pension Liability 132,483 107,615 Net Pension Liability 38(d) (26,288) (25,415) Net Assets Including Net Pension Liability 106,195 82,200
Deferred Capital Grants 24 29,614 28,603 Specific Endowments 25 838 817 Reserves Revaluation Reserve 26 63,716 38,164 Income and Expenditure Reserve 27 38,315 40,031 Pension Reserve 28 (26,288) (25,415) Total Funds 106,195 82,200
The Financial Statements on pages 34 to 65 were approved by the Council on 12 December 2006 and signed on its behalf by:- Professor M Harloe Vice-Chancellor Mr J Greenough FCA, CPFA Chairman of Finance Committee Mr R Corner CPFA Director of Finance
37 Annual Report & Financial Statements Consolidated Cash Flow Statement
Consolidated Cash Flow Statement for the Year Ended 31 July 2006
Restated Note 2005-06 2004-05 £’000 £’000 Cash (Outflow)/Inflow from Operating Activities 32 (1,694) 6,614 Returns on Investments and Servicing of Finance 33 (1,279) (322) Capital Expenditure and Financial Investment 34 (8,651) (24,597) Disposal of SUBEL 11 - (49) Management of Liquid Resources 35 11,679 10,567 Financing 36 (968) 8,429 (Decrease)/Increase in Cash in the Year (913) 642
Reconciliation of Net Cash Flow to increase in Net Debt to the year ended 31 July 2006 (Decrease)/Increase in Cash in the Year 37 (913) 642 Decrease in Investments 37 (11,679) (10,567) New Loans 36 - (14,000) Repayment of Loans and Leases 36 968 5,571 Movement in Net Debt in the Year 37 (11,624) (18,354) Net Debt at 1 August 2005 37 (7,283) 11,071 Net Debt at 31 July 2006 37 (18,907) (7,283)
38 Annual Report & Statement of Principal Accounting Policies Financial Statements
Statement of Principal Accounting Policies
1. Basis of Preparation Standard (FRS) 2, the activities of the Student Union have These Financial Statements have been prepared in not been consolidated because the University does not accordance with the Revised Statement of Recommended control those activities. Practice (SORP): Accounting in Further and Higher Education Institutions and in accordance with applicable 4. Recognition of Income Accounting Standards. They conform to guidance Income from research grants, contracts and other services published by Higher Education Funding Council rendered is included to the extent of the completion of the for England. contract or service concerned. This is generally equivalent to the sum of the relevant expenditure incurred during the 2. Basis of Accounting year and any related contributions towards overhead costs. The Financial Statements are prepared under the historical All income from short-term deposits is credited to the cost convention modified by the revaluation of certain income and expenditure account in the period in which it is fixed assets. earned. Income from specific endowments and donations is included to the extent of the relevant expenditure incurred In preparing the financial statements for the current year, during the year, together with any related contributions the University has adopted the following Financial towards overhead costs. Recurrent grants from the Funding Reporting Standards: Councils are recognised in the period in which they are the final transition arrangements requiring full adoption of receivable. Non-recurrent grants from Funding Councils or other bodies received in respect of the acquisition or FRS17 “ Retirement Benefits” construction of fixed assets are treated as deferred capital FRS21 “ Events after the balance sheet date” grants and amortised in line with depreciation over the life FRS25 “ Financial Instruments : Disclosure and Presentation” of the assets. All other income is credited to the Income FRS28 “ Corresponding amounts” and Expenditure Account in the period in which it is earned. FRS17 “ Retirement Benefits” During the year the University has changed the accounting 5. Maintenance of Premises policy with respect to retirement benefits, following the The University has a rolling long term maintenance plan, mandatory full implementation of FRS 17 "Retirement which forms the basis of the ongoing maintenance of the Benefits". FRS 17 requires that financial statements reflect estate. The costs of long term and routine corrective at fair value the assets and liabilities arising from an maintenance are charged to the income and expenditure employer's retirement benefit obligations and any related account as incurred. funding. The operating costs of providing retirement benefits are recognised in the period in which they are 6. Foreign Currency Translation earned, together with any related finance costs and Transactions denominated in foreign currencies are changes in the value of related assets and liabilities. The recorded at the rate of exchange ruling at the dates of the results for 2006 have been prepared on the revised basis, transactions. Monetary assets and liabilities denominated in and the 2005 results have been restated to reflect this foreign currencies are translated into sterling either at year change in accounting policy. The impact of the prior year end rates or, where there are related forward exchange adjustment is disclosed in note 13 to the financial contracts, at contract rates. The resulting exchange statements. Financial Reporting Standards 21,25 and 28 differences are dealt with in the determination of income had no impact on the University. and expenditure for the financial year.
3. Basis of Consolidation 7. Pension Schemes The consolidated Financial Statements include the The three principal pension schemes for the University’s University and its subsidiary undertakings. The results of staff are the Universities Superannuation Scheme (USS), subsidiaries acquired or disposed of during the period are Greater Manchester Pension Fund (GMPF) and the Teachers included in the consolidated income and expenditure Pension Scheme (TPS). All are defined benefit schemes account from the date of acquisition or up to the date of which are externally funded and contracted out of the disposal. Intra-group sales and profits are eliminated fully State Earnings Related Pension Scheme. Pension costs are on consolidation. In accordance with Financial Reporting assessed on the latest actuarial valuations of the schemes’ and in the case of USS and TPS (both multi-employer
39 Annual Report & Financial Statements Statement of Principal Accounting Policies
schemes’) the contributions are charged directly to the grants) it is capitalised and depreciated as above. The related income and expenditure account as if the schemes’ were grants are treated as deferred capital grants and released to defined contribution schemes’. In the case of GMPF the income over the expected useful life of the equipment. In schemes’ assets are included at market value and scheme the case of research grants the equipment is capitalised and liabilities are measured on an actuarial basis using the depreciated over the period of the research grants. The projected unit method; these liabilities are discounted at the related research grants are treated as deferred capital grants current rate of return on AA rated corporate bonds. The and released to income over the life of the research grant. post-retirement benefit surplus or deficit is included on the University’s balance sheet, net of the related amount of 10. Leased Assets deferred tax. Surpluses are only included to the extent that Costs in respect of operating leases are charged on a they are recoverable through reduced contributions in the straight line basis over the lease term. future or through refunds from the schemes. The current 11. Investments service cost and any past service costs are included in the Fixed asset investments that are not listed on a recognised profit and loss account within operating expenses and the stock exchange are carried at historical cost less any expected return on the schemes’ assets, net of the impact of provision for impairment in their value. Endowment asset the unwinding of the discount on scheme liabilities, is investments are included in the balance sheet at market included within other finance income. Actuarial gains and value. Current asset investments are included in the losses, including differences between the expected and balance sheet at the lower of their original cost and net actual return on scheme assets, are recognised, net of the realisable value. related deferred tax, in the statement of total recognised gains and losses. 12. Stocks Stocks are estimated at the lower of their cost and net 8. Land and Buildings realisable value. Where necessary, provision is made for Land and Buildings are valued every 5 years in accordance obsolete, slow moving and defective stocks. with FRS15. The basis of valuation is a combination of the depreciated replacement cost and open market value. 13. Taxation Additions in the intervening 5 years, prior to valuation are The University is an exempt charity within the meaning of valued at cost. Land which is held freehold is not depreciated schedule 2 of the Charities Act 1993 and as such is a charity as it has an indefinite life. Buildings are depreciated over within the meaning of section 506 (1) of the Income and their expected useful lives up to a maximum of 50 years. Corporation Taxes Act (ICTA) 1988. Accordingly, it is Where building works are carried out to improve buildings, potentially exempt from taxation in respect of income or the refurbishment costs are capitalised and depreciated over capital gains received within categories covered by section their useful economic life. Where buildings are acquired with 505 of the ICTA 1988 or section 256 of the Taxation of the aid of specific grants they are capitalised and depreciated Chargeable Gains Act 1992, to the extent that such income as above. The related grants are treated as deferred capital or gains are applied to exclusively charitable purposes. The grants and released to income over the expected useful life University receives no similar exemption in respect of Value of the buildings. A review for impairment of fixed assets is Added Tax (VAT). The University’s subsidiary companies are carried out if there are significant events, or changes in subject to Corporation Tax and VAT in the same way as any circumstances which indicate that the carrying amount of the commercial organisation. fixed assets may not be recoverable. 14. Liquid Resources 9. Equipment Liquid resources include sums on short-term deposits Equipment, including computers and software, costing more with recognised banks and building societies and than £20,000 per individual item or group of related items is government securities. capitalised in the year of acquisition. Capitalised equipment is stated at cost and depreciated on a straight line basis over 15. Provisions its expected useful life of between 3 and 20 years. Provisions are recognised when the Group has a present Equipment which is not capitalised is charged to the Income legal or constructive obligation as a result of a past event and Expenditure Account as incurred. Where equipment is and it is probable that a transfer of economic benefit will be acquired with the aid of specific grants (except for research required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
40 Annual Report & Notes to the Accounts Financial Statements
Notes to the Accounts
1 Funding Council Grants 2005-06 2004-05 £’000 £’000 Higher Education Funding Council Teaching Funds 43,104 41,850 Research Funds 7,923 6,201 Other 4,459 3,140 Release of Land & Buildings Grants (Note 24) 1,230 1,109 Release of Equipment Grants (Note 24) 1,213 1,037 57,929 53,337
2 Tuition Fees and Education Contracts 2005-06 2004-05 £’000 £’000 Full-time Students 12,156 11,509 Full-time Students Charged Overseas Fees 10,853 10,741 Part-time Students 4,719 4,189 Research Training Support Grants 501 544 Other Teaching Contracts 23,587 21,940 Short Courses 491 603 52,307 49,526
3 Research Grants and Contracts 2005-06 2004-05 £’000 £’000 Research Councils 2,900 3,461 UK Charities 465 292 Central Government 2,037 2,022 Industry 96 287 European Union Central 1,607 2,190 European Union Other 92 213 Other Overseas 148 181 Release of Equipment Grants (Note 24) 111 518 7,456 9,164
4 Other Income 2005-06 2004-05 £’000 £’000 Residencies, Catering and Conferences 8,419 7,941 Other Services Rendered 15,483 16,242 Other Income Generating Activities 4,246 3,614 Release of Land & Buildings Grants (Note 24) 195 208 Release of Equipment Grants (Note 24) 105 117 28,448 28,122
41 Annual Report & Financial Statements Notes to the Accounts
5 Endowment and Investment Income Restated 2005-06 2004-05 £’000 £’000 Investment Income and Other Interest Receivable 518 1,321 Allocated to Standardisation of Pension Benefits to Former University College Staff Provision (Note 23) (34) (34) Allocated to Specific Endowments (Note 25) (35) (44) Net return on pension scheme 163 - 612 1,243
6 Staff Costs 2005-06 2004-05 Number Number The staff numbers by major category (including senior post holders) employed by the University during the period, expressed as full-time equivalent:- Academic 1,063 1,083 Administrative, including clerical and manual 1,530 1,481 2,593 2,564
Restated 2005-06 2004-05 £’000 £’000 Wages and Salaries 70,211 68,531 Social Security Costs 5,756 5,471 Other Pension Costs (Note 38) 8,998 8,100 84,965 82,102 Early Retirement and Voluntary Severance 1,386 2,206 86,351 84,308
Emoluments of the Vice-Chancellor 2005-06 2004-05 £’000 £’000 Salary 189 168 Benefits in Kind 11 Sub Total 190 169 Pension Contributions 51 24 Total Emoluments 241 193 In 2004-05 the University’s contributions on behalf of the Vice–Chancellor to the University Superannuation Scheme (USS) were paid at the same rates as for the other academic staff and amounted to £23,546. In 2005-06 the University reviewed the Vice-Chancellor’s pension arrangements in anticipation of the introduction of pension simplification legislation on 6 April 2006. The University agreed to revise the Vice-Chancellor’s arrangements on the basis that no additional costs should be incurred by the University. This resulted in the Vice-Chancellor leaving the superannuation scheme with effect from 31 March 2006. The savings made by the University in terms of the employer’s contribution have been paid to the Vice-Chancellor in the form of the purchase of “added years” in 2005-06 (£34,309) and enhanced salary with effect from 1 April 2006 (approximately 7% per annum).
42 Annual Report & Notes to the Accounts Financial Statements
Remuneration of Other Higher Paid Staff Over £70,000 2005-06 2004-05 (Including employer’s pension contributions, but excluding Number Number employer’s National Insurance)
£ 70,001 - £ 80,000 15 13 £ 80,001 - £ 90,000 8 2 £ 90,001 - £100,000 1 2 £100,001 - £110,000 2 2 £110,001 - £120,000 1 - £120,001 - £130,000 - 1 £170,000 - £180,000 1 -
In 2005-06 a higher paid member of staff took early retirement. Additional pension contributions of £63,765 were paid to USS and this is included in the relevant remuneration disclosure band.
7 Other Operating Expenses 2005-06 2004-05 £’000 £’000 Fees and Invoiced Staff 2,173 2,501 Staff Expenses (including travel, hospitality and conferences) 3,657 3,273 Student Expenses 3,272 2,652 Marketing 808 766 Vehicle and Transport Costs 532 427 Consumables 1,138 912 Information Services 5,757 5,008 Communications 1.208 1,105 Stationery/Photocopying/Printing 1,849 1,809 Equipment and Furniture 2,061 1,561 Fees and Expenses 7,755 8,456 Licences/Insurance/Subscriptions 2,241 2,138 Catering 858 822 Household Expenses 232 212 Financial Charges 647 772 Security 679 674 Utilities/Rates/Rents 3,671 3,565 Premises Maintenance 5,631 7,149 Arts & Media Development Costs 3,845 - Subsidiary Company Expenditure 4,842 4,189 52,856 47,991
The status of a scheme to develop an Arts and Media Centre is currently under review. In the light of this, capitalisation of expenditure is not considered appropriate and the costs incurred to date have been written off to expenditure.
43 Annual Report & Notes to the Accounts Financial Statements
7 Other Operating Expenses (Continued) 2005-06 2004-05 £’000 £’000 Fees and Expenses includes:- External Auditors’ Remuneration 45 46 Other Services from External Auditor 25 56 Internal Auditors’ Remuneration 142 106
8 Depreciation 2005-06 2004-05 £’000 £’000 The depreciation charge has been funded by:- Deferred Capital Grant (Note 24) 2,854 2,989 Revaluation Reserve (Note 26) 1,267 1,394 General Income 4,089 3,159 8,210 7,542
Restated 9 Interest Payable 2005-06 2004-05 £’000 £’000 Net Interest on Pension Schemes (Note 38c) 427 393 Students’ Union Deposit Interest 66 70 Bank and Other Loans not Wholly Repayable within Five Years 1,432 1,145 Loan Interest Payable 1,925 1,608 Other Interest Payable 1 1 1,926 1,609
The Students’ Union deposits funds with the University for onward investment with Royal London Asset Management and Tilney Investment Management.
44 Annual Report & Notes to the Accounts Financial Statements
10. Analysis of Expenditure by Activity
Staff Costs Other Depreciation Interest Total Operating Expenses
Restated Restated 05/06 04/05 05/06 04/05 05/06 04/05 05/06 04/05 05/06 04/05 £000 £000 £000 £000 £000 £000 £000 £000 £’000 £’000 Academic Departments 50,154 47,665 12,030 11,528 1,060 864 - 33 63,244 60,090 Academic Services 5,508 5,170 5,031 4,274 531 509 - 15 11,070 9,968 Administration 11,665 10,510 8,347 7,638 338 708 - 19 20,350 18,875 Premises 5,484 5,200 9,183 10,420 4,962 3,878 1,433 996 21,062 20,494 Exceptional Premises Costs -- 3,845 - - - - - 3,845 - Residencies, Catering and Conferences 2,596 2,388 4,418 3,861 1,092 929 - 167 8,106 7,345 Research Grants and Contracts 3,767 4,714 1,603 2,310 111 518 - - 5,481 7,542 Other Expenses 7,177 8,661 8,399 7,960 116 136 493 379 16,185 17,136 86,351 84,308 52,856 47,991 8,210 7,542 1,926 1,609 149,343 141,450
45 Annual Report & Financial Statements Notes to the Accounts
11 Exceptional Items 2005-06 2004-05 £’000 £’000 Demolition of Meadow Road Campus 313 Loss on demolition of Venables Building 434 Impairment on anticipated demolition of Allerton Annexe 627 Impairment on anticipated demolition of Lankester Building 214 Disposal of 60% of Unity Marketplace Ltd 22
Loss on liquidation of Salford University Business Enterprises Ltd (SUBEL) in 2004/05 Net Assets Disposed:- Cash 122 Less Minority Interest (45) Less Disposal Proceeds (73) Total Exceptional Items 1,610 4
12 Taxation There is no UK Corporation tax payable by the various organisations within the Group.
13 Prior Year Adjustment The prior year adjustment has arisen due to the full implementation of FRS 17, as disclosed within the principal accounting policies and the re-analysis of accumulated income within specific endowments.
Consolidated Income and 2004-05 Re-analysis of FRS 17 2004-05 Expenditure Account Original Endowment Restatement Restated Accounts Transfer Accounts £’000 £’000 £’000 £’000 Endowment & Investment Income (959) 215 (499) (1,243) Staff Costs 83,573 - 735 84,308 Interest Payable 1,216 - 393 1,609 Transfer from Accumulated Income Within Specific Endowments - (215) - (215) Net Consolidated Income and Expenditure Impact 83,830 - 629 84,459
46 Annual Report & Notes to the Accounts Financial Statements
Consolidated Balance Sheet 2005 Original FRS17 2005 Restated Accounts Restatement Accounts £’000 £’000 £’000 Fixed Assets 132,177 - 132,177 Endowments 817 - 817 Net Current Assets 274 - 274 Creditors: Amounts Falling Due After More Than One Year (22,953) - (22,953) Provisions for Liabilities and Charges (11,029) 9,040 (1,989) Net Assets Excluding Pension Deficit 99,286 9,040 108,326 Pension Deficit - (25,415) (25,415) Net Assets Including Pension Deficit 99,286 (16,375) 82,911 Deferred Capital Grants 28,603 - 28,603 Specific Endowments 817 - 817 Revaluation Reserve 38,164 - 38,164 Income and Expenditure Reserve 31,702 9,040 40,742 Pension Reserve - (25,415) (25,415) Total Funds 99,286 (16,375) 82,911
University Balance Sheet 2005 Original FRS17 2005 Restated Accounts Restatement Accounts £’000 £’000 £’000 Fixed Assets 132,070 - 132,070 Endowments 817 - 817 Net Current Liabilities (455) - (455) Creditors: Amounts Falling Due After More Than One Year (22,828) - (22,828) Provisions for Liabilities and Charges (11,029) 9,040 (1,989) Net Assets Excluding Pension Deficit 98,575 9,040 107,615 Pension Deficit - (25,415) (25,415) Net Assets Including Pension Deficit 98,575 (16,375) 82,200 Deferred Capital Grants 28,603 - 28,603 Specific Endowments 817 - 817 Revaluation Reserve 38,164 - 38,164 Income and Expenditure Reserve 30,991 9,040 40,031 Pension Reserve - (25,415) (25,415) Total Funds 98,575 (16,375) 82,200
47 Annual Report & Notes to the Accounts Financial Statements
14 Tangible Assets Land & Buildings Assets in the Equipment Total Course of Construction Consolidated £’000 £’000 £’000 £’000 Historical Cost/Valuation At 1 August 2005 124,099 20,616 25,212 169,927 Revaluation at 31 July 2006 8,975 - - 8,975 Additions 6,384 5,754 4,588 16,726 Transfers 22,092 (22,092) - - Exceptional Arts & Media Development Costs - (3,845) - (3,845) Disposals (7,773) - (1,315) (9,088) At 31 July 2006 153,777 433 28,485 182,695
Depreciation At 1 August 2005 20,653 - 17,155 37,808 Revaluation at 31 July 2006 (18,347) - - (18,347) Charge for the Year 5,499 - 2,711 8,210 Exceptional Impairment charge 1,200 - - 1,200 Disposals (7,390) - (1,306) (8,696) At 31 July 2006 1,615 - 18,560 20,175 Net Book Value At 31 July 2006 152,162 433 9,925 162,520 At 1 August 2005 103,446 20,616 8,057 132,119
Land and Buildings with a net book value of £53,481,000 and have been funded from Treasury sources.Should these Land and Buildings be sold the University would either have to surrender the proceeds to the Treasury or use them in accordance with the University’s Financial Memorandum with the Higher Education Funding Council for England.The Land and Building assets of the University are freehold and were revalued on 31 July 2006 by Dunlop Haywards (Property Consultants).
2006 2005 £’000 £’000 The net book value of the Land and Buildings can be analysed as:- 2006 Valuation Market Value 14,102 - 2006 Valuation Depreciated Replacement Cost 137,941 - 2004 Valuation Market Value - 6,922 2001 Valuation Depreciated Replacement Cost - 83,186 2001 Valuation Market Value - 2,400 Historical Cost (Including Assets in the Course of Construction) 552 31,554 152,595 124,062
48 Annual Report & Notes to the Accounts Financial Statements
Land & Buildings Assets in the Equipment Total Course of Construction University £’000 £’000 £’000 £’000 Historical Cost/Valuation At 1 August 2005 124,099 20,616 24,481 169,196 Revaluation at 31 July 2006 8,975 - - 8,975 Additions 6,384 5,754 4,563 16,701 Transfers 22,092 (22,092) - - Exceptional Arts & Media Development Costs - (3,845) - (3,845) Disposals (7,773) - (863) (8,636) At 31 July 2006 153,777 433 28,181 182,391
Depreciation At 1 August 2005 20,653 - 16,475 37,128 Revaluation at 31 July 2006 (18,347) - - (18,347) Charge for the Year 5,499 - 2,655 8,154 Exceptional Impairment Charge 1,200 - - 1,200 Disposals (7,390) - (863) (8,253) At 31 July 2006 1,615 - 18,267 19,882
Net Book Value At 31 July 2006 152,162 433 9,914 162,509 At 1 August 2005 103,446 20,616 8,006 132,068
15 Investments 2006 2005 £’000 £’000 Consolidated Trade Investments 49 58 Investments in associated undertakings 31 - 80 58 University Trade Investments 2 2
49 Annual Report & Notes to the Accounts Financial Statements
Shares in Group Undertakings at 31 July 2006 represent investments, by the University and/or University of Salford Enterprises Limited in the following Companies which are all registered and operating in England and Wales.
Company Name Principal Activity Class of Shares % Held % Held by the by the University Group Salford Software Limited Software Marketing Ordinary - 100.0 University of Salford (Health Services Training) Limited Training Ordinary 100.0 100.0 University of Salford Enterprises Limited Business Development , Consultancy and Investment Management Ordinary 100.0 100.0 Skyscope Limited Dormant Ordinary 100.0 100.0 Crescent Purchasing Limited Purchasing Services Ordinary - 100.0
On 31 January 2006 Unity Marketplace Ltd (a group company that was 100% owned at 31 July 2005) issued further shares to e – Government Solutions Limited. The effect of this was to dilute the Group’s effective share holding from100% to 40%. This investment is accounted for using the equity method of accounting. Trade investments by University of Salford Enterprises Limited and/or University of Salford in Companies registered and operating in England and Wales comprise:-
Photonics Research Systems Limited Consultancy Ordinary - 24.0 AUR Hydropower Limited Dormant Ordinary - 14.8 The Incubation Partnership Limited Dormant Limited by Guarantee - 25.0 Super Services Limited Marketing Ordinary 2.0 2.0 Sustainability North WestLimited Research Limited by Guarantee 50.0 50.0 Video Arts Limited Media Training Ordinary - 0.2 CVD Technology Limited Industrial Processes Ordinary - 20.0 Learning Expanse Limited E-Learning Software Ordinary - 20.0 The Protocol Lab Limited Construction Industry Software Ordinary - 20.0 Unity Marketplace Limited Software Development Ordinary 40.0 40.0 NFAB Limited Nanotechnology Ordinary 3.1 3.1 Contraception Education Limited Board Game Ordinary - 7.5 Foodparks UK Limited Business Parks Ordinary - 10.0 One Central Park Limited Business Parks Ordinary - 20.0 Innomet Limited Wire Manufacture Ordinary - 10.0
The University also has a small shareholding in CVCP properties plc, a company set up by Universities UK to own its head office building in central London. The Group’s share of the turnover of this company is not considered to be material.
50 Annual Report & Notes to the Accounts Financial Statements
16 Endowment Asset Investments 2006 2005 £’000 £’000 Consolidated and University At 1 August 2005 817 866 Increase/(Decrease) 21 (49) At 31 July 2006 838 817
All the endowment funds are invested in Short Term Investments in accordance with the treasury management policy of the University.
17 Stock 2006 2005 £’000 £’000 Consolidated Building and Engineering Stores 109 100 Catering Stock 22 24 Work in Progress 48 - Goods for sale 4- 183 124 University Building and Engineering Stores 109 100 Catering Stock 22 24 131 124
18 Debtors 2006 2005 £’000 £’000 Consolidated Amounts Falling Due Within One Year: Trade Debtors 5,413 6,323 Amounts Due on Research Grants and Contracts 1,239 1,071 Accrued Income 4,054 4,026 Prepayments 1,295 1,544 12,001 12,964 University Amounts Falling Due Within One Year: Trade Debtors 3,629 4,628 Amounts Due on Research Grants and Contracts 1,239 1,071 Accrued Income 3,076 3,998 Prepayments 1,226 1,277 Amounts Owed by Subsidiary Undertakings - 65 9,170 11,039
51 Annual Report & Financial Statements Notes to the Accounts
19 Investments 2006 2005 £’000 £’000 Consolidated and University Short Term Investments 4,747 16,660 Allocated to Endowment Investments (Note 16) (838) (817) 3,909 15,843
20 Creditors: Amounts Falling Due Within One Year 2006 2005 £’000 £’000 Consolidated Students’ Union Deposit 1,294 1,549 Current Portion of Long Term Creditors 1,255 1,137 Research Contract Payments Received on Account 1,920 2,082 Trade Creditors 4,001 2,938 Social Security and Other Taxation Payable 2,662 2,699 Other Payroll Creditors 1,085 994 Accruals 5,675 9,465 Other Creditors 189 199 Deferred Income 6,554 8,813 24,635 29,876 University Students’ Union Deposit 1,294 1,549 Current Portion of Long Term Creditors 1,255 1,087 Research Contract Payments Received on Account 1,920 2,082 Trade Creditors 3,177 2,617 Social Security and Other Taxation Payable 1,892 1,824 Other Payroll Creditors 1,085 994 Accruals 5,473 9,214 Other Creditors 189 210 Deferred Income 4,786 5,783 Amounts Due to Subsidiary Undertakings 1,500 3,185 22,571 28,545
52 Annual Report & Notes to the Accounts Financial Statements
21 Creditors: Amounts Falling Due After More Than One Year 2006 2005 £’000 £’000 Consolidated Deferred Income 280 240 Other Creditors - 929 Repayable Grant from HEFCE 125 125 Mortgages Secured on Residential and Other Property 20,698 21,659 21,103 22,953 University Deferred Income 280 240 Other Creditors - 929 Repayable Grant from HEFCE 125 - Mortgages Secured on Residential and Other Property 20,698 21,659 21,103 22,828
22 Borrowings 2006 2005 22 (a) Bank Loans and Mortgages £’000 £’000 Consolidated Amounts Falling Due Within 1 Year 1,130 1,137 Amounts Falling Due Within 1 to 2 Years 1,181 1,130 Amounts Falling Due Within 2 to 5 Years 2,533 3,714 Amounts Falling Due After 5 Years or More 16,984 16,815 21,828 22,796 University Amounts Falling Due Within 1 Year 1,130 1,087 Amounts Falling Due Within 1 to 2 Years 1,181 1,130 Amounts Falling Due Within 2 to 5 Years 2,533 3,714 Amounts Falling Due After 5 Years or More 16,984 16,815 21,828 22,746 22 (b) Analysis of Loans Date Loan Security Date Interest Balance Obtained Repayable Rate £’000 1996 Centenary Building 2021 Variable on Libor 3,208 2001 None 2011 Variable on Libor 2,130 2004 Mary Seacole Building 2030 Fixed at 5.86% 16,490
University & Consolidated Total 21,828
The University has also arranged for a £50m loan facility at a fixed rate to be drawn down by December 2008.
53 Annual Report & Financial Statements Notes to the Accounts
23 Provisions for Liabilities and Charges Provision for Enhanced Pension Standardisation Total Residential Benefits Payable of Pension Accommodation to Retired Staff Benefits to Former Lease University College Salford Staff £’000 £’000 £’000 £’000 Consolidated and University As previously reported at 1 August 2005 1,366 9,040 623 11,029 Prior Year Adjustment - (9,040) - (9,040) Restated at 1 August 2005 1,366 - 623 1,989 Expenditure in Year (1,366) - (127) (1,493) Interest on Funds (Note 5) - - 34 34 Transfer from Income and Expenditure Account - - 91 91 As at 31 July 2006 - - 621 621
The prior year adjustment relates to the introduction of FRS 17 and the reclassification of enhanced pension benefits payable to retired staff within the pension scheme deficit.
24 Deferred Capital Grants Land & Buildings Equipment Total £’000 £’000 £’000 Consolidated and University Higher Education Funding Council Grants At 1 August 2005 20,977 2,004 22,981 Grant Received 1,767 2,398 4,165 Released to Income and Expenditure (Note 1) (1,230) (1,213) (2,443) Exceptional Release on anticipated demolition of Lankester Building (Note 11) (359) - (359) At 31 July 2006 21,155 3,189 24,344
Other Grants At 1 August 2005 5,173 449 5,622 Grant Received - 59 59 Released to Income and Expenditure (Notes 3,4) (195) (216) (411) At 31 July 2006 4,978 292 5,270
Total At 31 July 2006 26,133 3,481 29,614 At 1 August 2005 26,150 2,453 28,603
54 Annual Report & Notes to the Accounts Financial Statements
25 Specific Endowments 2005-06 2004-05 £’000 £’000 Consolidated and University At 1 August 2005 817 866 Additions 49 122 Interest (Note 5) 35 44 Expenditure for Year (63) (215) At 31 July 2006 838 817 2005-06 2004-05 £’000 £’000 Representing: Prize Funds 251 231 Chair and Lectureship Funds 112 124 Other Funds 475 462 At 31 July 2006 838 817
26 Revaluation Reserve University Consolidated £’000 £’000 At 1 August 2005 38,164 38,164 Transferred to Income and Expenditure Account (Note 27) (1,267) (1,267) Transfer to Income and Expenditure Account on disposal and demolition of buildings (503) (503) Revaluation of properties at 31 July 2006 (Note 14) 27,322 27,322 At 31 July 2006 63,716 63,716
27 Income and Expenditure Reserve University Consolidated £’000 £’000 Balance previously reported at 1 August 2005 30,991 31,702 Prior Year Adjustment (Note 13) 9,040 9,040 Restated Balance at 1 August 2005 40,031 40,742 Transferred from Revaluation Reserve (Note 26) 1,267 1,267 Transfer from Revaluation Reserve on disposal and demolition of buildings 503 503 Transfer to Pension Reserve (Note 28) 920 920 Deficit for the Financial Year (4,406) (4,122) As at 31 July 2006 38,315 39,310
28 Pension Reserve University Consolidated £’000 £’000 Balance previously reported at 1 August 2005 - - Prior Year Adjustment (Note 13) (25,415) (25,415) Restated Balance at 1 August 2005 (25,415) (25,415) Actuarial Gain (Note 38b) 47 47 Transferred from Income and Expenditure Reserve (Note 27) (920) (920) Pension Reserve at 31 July 2006 (26,288) (26,288)
55 Annual Report & Notes to the Accounts Financial Statements
29 Financial Commitments 2006 2005 £’000 £’000 At 31 July the annual commitments under non-cancellable operating leases were as follows: Consolidated Land and Buildings Within One Year 279 1,583 Between Two and Five Years 134 358 Over Five Years 57 57 470 1,998 Other Within One Year 100 - Between Two and Five Years 461 660 Over Five Years -- 561 660 University Land and Buildings Within One Year 279 1,583 Between Two and Five Years 134 358 Over Five Years 21 21 434 1,962 Other Within One Year - - Between Two and Five Years 100 660 Over Five Years 461 - 561 660
30 Capital Commitments 2006 2005 £’000 £’000 Consolidated and University Commitments Contracted at 31 July 7,376 15,262 Authorised but not Contracted at 31 July 64,849 53,275
31 Contingent Liability Recent decisions handed down by the European Court of Justice (ECJ) may increase the liability for pension of UK part time employers, such as the University of Salford. The implications of the ECJ decision are unclear and clarification is still awaited, following appeals lodged as a result of test cases through an employment tribunal. In view of this uncertainty, no financial provision has been made in the financial statements in relation to this matter.
56 Notes to the Accounts Annual Report & Financial Statements
32 Reconciliation of Consolidated Operating Deficit to Restated Net Cash (Outflow)/Inflow from Operating Activities 2005-06 2004-05 £’000 £’000 Deficit before Taxation (4,185) (62) Depreciation 8,210 7,542 Exceptional Fixed Assets Charges 1,583 - Disposal of Unity Marketplace Ltd/SUBEL (Note 11) 22 4 Deferred Capital Grants Released to Income (Note 24) (3,213) (2,989) Investment Income (Note 5) (612) (1,243) Interest Payable and Similar Charges (Note 9) 1,926 1,609 Increase in Stocks (59) (23) Decrease/(Increase) in Debtors 891 (3,206) (Decrease)/Increase in Creditors (5,809) 4,966 Decrease in Provisions (1,368) (1,306) Difference Between Pension Charge and Pension Contributions (Note 27) 920 1,322 Net Cash (Outflow)/Inflow from Operating Activities (1,694) 6,614
Restated 33 Returns on Investments and Servicing of Finance 2005-06 2004-05 £’000 £’000 Income from Endowments (Note 25) 35 44 Income from Short Term Investments (Note 5) 612 1,243 Interest Paid (Note 9) (1,926) (1,609) (1,279) (322)
34 Capital Expenditure and Financial Investment 2005-06 2004-05 £’000 £’000 Tangible Assets Acquired (Note 14) (12,881) (28,826) Endowment Assets (Purchased)/Disposed (Note 16) (21) 49 Investments (Purchased)/Disposed (Note 15) (22) 30 Deferred Capital Grants Received (Note 24) 4,224 4,028 Endowments Received (Note 25) 49 122 (8,651) (24,597)
35 Management of Liquid Resources 2005-06 2004-05 £’000 £’000 Movement in Students’ Union Deposit (255) 320 Movement in Investments 11,934 10,247 Net Cash Inflow from Management of Liquid Resources 11,679 10,567
57 Annual Report & Notes to the Accounts Financial Statements
36 Analysis of Changes in Consolidated Financing 2005-06 2004-05 £’000 £’000 At 1 August 2005 22,796 14,367 Loan from Barclays Bank Repayable by 2030 - 14,000 Repayments of Amounts Borrowed (968) (5,571) Net Amount Borrowed during the year (968) 8,429 At 31 July 2006 21,828 22,796
37 Analysis of Changes in 1 August 2005 Cash Flow 31 July 2006 Consolidated Net Funds £’000 £’000 £’000 Investments 15,843 (11,934) 3,909 Students’ Union Deposit (1,549) 255 (1,294) 14,294 (11,679) 2,615 Cash at Bank and in Hand 1,219 (913) 306 Debt Due Within One Year (1,137) 7 (1,130) Debt Due Over One Year (21,659) 961 (20,698) (7,283) (11,624) (18,907)
38 Pension Schemes The three principal schemes for the University’s staff are the Universities Superannuation Scheme (USS), the Teacher’s Pension Scheme (TPS) and the Greater Manchester Pension Fund (GMPF). The total pension cost for the University and its subsidiaries was:-
2005-06 2004-05 £’000 £’000 USS -Note 38(a) 5,026 4,736 GMPF-Note 38(b) 3,029 2,375 TPS -Note 38(c) 933 965 Other Pension Schemes 10 24 Ongoing Pension Costs (Note 6) 8,998 8,100 USS Early Retirement Costs 592 502 GMPF Curtailments and Settlements 66 31 TPS Curtailments and Settlements 144 901 Total Pension Costs 9,800 9,534
58 Notes to the Accounts Annual Report & Financial Statements
38(a) Universities Superannuation Scheme (USS) The University participates in the Universities Superannuation Scheme, a defined benefit scheme, which is externally funded and contracted out of the State Second Pension. The assets of the scheme are held in a separate trustee administered fund. Under the definitions set out in FRS 17 (Retirement Benefits) the USS is a multi-employer pension scheme and the University is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly the University has taken advantage of the exemption in FRS 17 and has accounted for its contributions to the scheme as if it were a defined contribution scheme. The cost recognised within the Income and Expenditure Account is therefore equal to the contributions payable to the scheme for the year. The latest actuarial valuation was at 31 March 2005.The main results and assumptions of the valuation of the USS are as follows:-
Latest Actuarial Valuation date 31 March 2005 Valuation method Projected Unit Value of assets £21,740m Value of past service liabilities £28,308m Deficit £6,568m Funding level for accrued benefits 77% Investment return per annum for past service liabilities 4.5 % Salary increase per annum for past service liabilities 3.9% Pension increases per annum for past service liabilities 2.9% Investment return per annum for future service liabilities 6.2% Salary increases per annum for future service liabilities 3.9% Pension increases per annum for future service liabilities 2.9%
The actuary also valued the scheme on a number of other bases as at the valuation date. Using the Minimum Funding Requirement prescribed assumptions introduced by the Pensions Act 1995, the scheme was 126% funded at that date; under the Pension Protection Fund regulations introduced by the Pensions Act 2004 it was 110% funded; on a buy-out basis (i.e. assuming the Scheme had discontinued on the valuation date) the assets would have been approximately 74% of the amount necessary to secure all the USS benefits with an insurance company; and using the FRS17 formula as if USS was a single employer scheme, the actuary estimated that the funding level would have been approximately 90%.
The University contribution rate required for future service benefits alone at the date of valuation was 14.3% of salaries but it was agreed that the University contribution rate will be maintained at 14% of salaries. Surpluses or deficits which arise at future valuations may impact on the institution’s future contribution commitment. An additional factor which could impact the funding level of the scheme is that with effect from 16 March 2006, USS positioned itself as a “last man standing” scheme so that in the event of the insolvency of any of the participating employers in USS, the amount of any pension funding shortfall (which cannot otherwise be recovered) in respect of that employer will be spread across the remaining participant employers and reflected in the next actuarial valuation for the scheme.
59 Annual Report & Notes to the Accounts Financial Statements
38(b) Greater Manchester Pension Fund (GMPF) The University participates in the GMPF, which is an externally funded defined benefit pension scheme, which is contracted out of the State Second Pension, where contributions payable are held in a trust separately from the University.
The following information is based upon a full actuarial valuation of the fund as at 31 March 2004 updated to 31 July 2005 and 31 July 2006 and a full actuarial valuation at 31 March 2001 updated 31 July 2004 by a qualified independent actuary (Hymans Robertson). 31 July 2006 31 July 2005 31 July 2004 Inflation 3.1% 2.8% 2.9% Rate of increase in salaries 4.6% 4.3% 4.4% Rate of increase in pensions 3.1% 2.8% 2.9% Discount rate for liabilities 5.1% 5.0% 5.8%
The assets in the scheme, of which the University’s share is estimated at 0.96% (2004/2005 0.95%, 2003/04 0.98%), and the expected rates of return were:
Value at Value at Value at 31 July 2006 31 July 2005 31 July 2004 £’000 £’000 £’000 Equities 5,515,700 5,043,000 4,190,000 Bonds 1,408,100 1,188,000 1,019,000 Property 794,000 684,000 618,000 Cash 617,300 595,000 359,000 Total Market Value of Assets 8,335,100 7,510,000 6,186,000
Long term Long term Long term Rate of Return Rate of Return Rate of Return Expected at Expected at Expected at 31 July 2006 31 July 2005 31 July 2004 Equities 7.7% 7.3% 7.9% Bonds 4.7% 4.7% 5.4% Property 5.7% 5.4% 6.7% Cash 4.8% 4.5% 4.5%
2006 2005 2004 £’000 £’000 £’000 University’s Estimated Asset Share 80,081 71,350 60,602 Present Value of Scheme Liabilities (93,874) (84,431) (72,033) Present Value of Unfunded Liabilities (4,617) (4,568) (4,252) Total Value of Liabilities (98,491) (88,999) (76,285) Deficit in the Scheme (18,410) (17,649) (15,683)
60 Annual Report & Notes to the Accounts Financial Statements
Analysis of the Amount Charged to the Income and Expenditure Account 2005-06 2004-05 £’000 £’000 Service Cost 2,993 2,258 Past Service Cost 36 117 Curtailments and Settlements 66 31 Total Operating Charge 3,095 2,406
Analysis of Net Return on Pension Scheme 2005-06 2004-05 £’000 £’000 Expected Return on Pension Scheme Assets 4,647 4,352 Interest on Pension Scheme Liabilities (4,484) (4,444) Net Return 163 (92)
Amounts Recognised in the Statement of Recognised Gains and Losses 2005-06 2004-05 £’000 £’000 Actual Return Less Expected Return on Pension Scheme Assets 3,642 8,402 Experience Gains and Losses Arising on the Scheme Liabilities (52) 415 Change in Financial and Demographic Assumptions Underlying the Scheme Liabilities (3,543) (10,205) Actuarial Gain/(Loss) recognised in Statement of Gains and Losses 47 (1,388)
Movements in Deficit during Year 2005-06 2004-05 £’000 £’000 (Deficit) in Scheme at beginning of year (17,649) (15,683) Current Service Charge (2,993) (2,258) Contributions 1,827 1,637 Contributions in respect of Unfunded Benefits 297 283 Past Service Costs (36) (117) Impact of Settlements and Curtailments (66) (31) Net Interest/Return on Assets 163 (92) Actuarial Gain/(Loss) 47 (1,388) (Deficit) in Scheme at end of year (18,410) (17,649)
61 Annual Report & Notes to the Accounts Financial Statements
(38(b) Greater Manchester Pension Fund (GMPF) Continued)
History of Experience Gains or Losses
2005-06 2004-05 2003-04 2002-03 2001-02 Difference Between the Expected and Actual Return on Assets: £’000’s 3,642 8,402 2,029 (6) (9,467) % of Scheme Assets 4.5% 11.8% 3.3% 0.0% (18.8%) Experience Gains/(Losses) on Scheme Liabilities: £’000’s (52) 415 29 (4,448) 576 % of Scheme Liabilities (0.1%) 0.5% 0.0% (6.2%) 1.1% Total Amounts Recognised in Statement of Gains and Losses Amounts - £’000’s 47 (1,388) 1,964 (12,592) (4,455) % of Scheme Liabilities 0.0% (1.6%) 2.6% (17.7%) (8.3%)
38(c) Teachers’ Pension Scheme (TPS) Under the definitions set out in FRS 17 (Retirement Benefits), the TPS is a multi-employer pension scheme. The University is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the University has taken advantage of the exemption in FRS 17 and has accounted for its current service contributions to the scheme as if it were a defined contribution scheme. The Teachers’ Pension Scheme is an unfunded defined benefit scheme. Contributions on a “pay as you go” basis are credited to the Exchequer under arrangements governed by the Superannuation Act 1972.The pension cost is assessed every five years in accordance with the advice of the Government Actuary. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows:-
Latest actuarial valuation 31 March 2001 Actuarial method Prospective Benefits Investment returns per annum 7.0% Salary scale increases per annum 5.0% Market value of notional assets at date of last valuation £102,010m Proportion of members’ accrued benefits covered by the actuarial value of the assets 100%
62 Annual Report & Notes to the Accounts Financial Statements
Following the implementation of Teachers’ Pensions (Employers’ Supplementary Contributions) Regulations 2000, the Government Actuary carried out a further review on the level of employers’ contributions. The University paid contributions of 13.5% from 1 April 2003 to 31 July 2006. A number of early retirement benefits have been granted to TPS members and in this case the University is able to identify its share of the liabilities relating to early retirement. Prior to the introduction of FRS17 this was shown as part of the enhanced benefits payable to retired staff in Note 23. The major assumptions used were: -
31 July 2006 31 July 2005 31 July 2004 Total Interest Rate for Calculating Interest on Pension Liabilities 6% 6% 6% Net Interest Rate to Discount Scheme Liabilities 2.5% 2.5% 3%
2006 2005 2004 £’000 £’000 £’000 Present Value of Unfunded Liabilities 7,879 7,766 6,222
Analysis of the Amount Charged to the Income 2005-06 2004-05 and Expenditure Account £’000 £’000 Curtailments and Settlements 144 901
Analysis of Net Return on TPS Scheme Early 2005-06 2004-05 Retirements £’000 £’000 Interest on Pension Liabilities 427 301
Analysis of Amounts Recognised in Statement 2005-06 2004-05 of Recognised Gains and Losses £’000 £’000 Changes in Financial & Demographic Assumptions Underlying the Scheme Liabilities - (799)
63 Annual Report & Notes to the Accounts Financial Statements
38(c) Teachers’ Pension Scheme (TPS) (Continued) Movements in Deficit During Year 2005-06 2004-05 £’000 £’000 (Deficit) in Scheme at Beginning of Year (7,766) (6,223) Contributions in respect of Unfunded Benefits 459 458 Impact of Settlements and Curtailments (144) (901) Interest and Pension Liabilities (427) (301) Actuarial Gain/(Loss) - (799) (Deficit) in Scheme at End of Year (7,878) (7,766)
History of Experience Gains or Losses
2005-06 2004-05 2003-04 2002-03 2001-02 Total Amounts Recognised in Statement of Gains and Losses Amounts - £’000’s - (799) (70) (72) (1,035) % of Scheme Liabilities - (10.29%) (1.12%) (1.16%) (18.23%)
38(d) Pension Scheme Summary
The implementation of FRS 17 ‘Retirement Benefits’ resulted in the pension scheme deficits and actuarial (losses)/gains being included in the Financial Statements as follows:-
2005-06 2004-05 £’000 £’000 Balance Sheet – Pension Scheme Deficits Greater Manchester Pension Fund – Note 38(b) (18,410) (17,649) Teachers Pension Scheme Early Retirement – Note 38(c ) (7,878) (7,766) (26,288) (25,415)
2005-06 2004-05 £’000 £’000 Statement of Total Recognised Gains & Losses Actuarial Gains/(Losses) Greater Manchester Pension Fund – Note 38(b) 47 (1,388) Teachers Pension Scheme Early Retirement – Note 38(c) - (799) 47 (2,187)
64 Annual Report & Notes to the Accounts Financial Statements
39 Access Funds 2005-06 2004-05 £’000 £’000 Balance Brought Forward 182 238 HEFCE Grants 1,294 1,402 Interest Earned 25 33 Administration Costs (66) (29) Disbursed to Students (1,254) (1,462) Balance Carried Forward 181 182
Access Funding Council grants are available solely for students and the University acts only as paying agent. The grants and related disbursements are therefore excluded from the Income and Expenditure Account.
40 Related Party Transactions Due to the nature of the University’s operations and the composition of the Council, being drawn from local public and private sector organisations it is inevitable that transactions will take place with organisations in which a member of the Council may have an interest.In particular Mr W B Pennington is Councillor of Salford City Council and Mr D Lancaster is a Councillor of Salford City Council representing the Association of Greater Manchester Authorities.
All transactions involving organisations in which a member of the Council may have an interest are declared and conducted at arms length, in accordance with the University’s Financial Regulations and normal procurement procedures.
The University has taken advantage of the exemption allowed by Financial Reporting Standard 8 not to disclose transactions between group companies.
The Salford University Students’ Union has a close relationship with the University. The financial transactions between the two organisations can be summarised as:-
2005-06 2004-05 £’000 £’000 Annual Grant Paid to Students’ Union from University 715 669 Travel Agency and Other Services Paid to Students’ Union from University 188 466 Payments made to the University from Students’ Union for Services Provided (152) (141)
At the 31 July 2006 Student’s Union had £1,294,000 (2005: £1,549,000) invested with the University of Salford as detailed in Note 20.
65 Annual Report & Notes Financial Statements
Notes
66 Annual Report & Notes Financial Statements
Notes
67 Annual Report & Notes Financial Statements
Notes
68