Annual Report and Accounts 2 019 -20 Annual Report Contents
01 Chair’s Statement 04
02 Chief Executive’s Foreword 06
03 Strategic Report 08
04 Remuneration and Staff Report 34
05 Governance Statement 50
06 Parliamentary Accountability and Audit Report 62
07 Financial Statements 74 Chair’s Statement 01 01 Chair’s Statement
It is my pleasure to introduce SLC’s Of course, just like every other During 2019-20, SLC has not Compliance function and the everything that we can to improve Annual Report and Accounts for organisation, SLC has faced only delivered our core financial development of both a Workforce our customers’ experience. There the financial year 2019-20. It is a unprecedented challenges in the services to students but also Strategy and a People Strategy. is still much more that we can do to story of continued success in again final months of 2019-20 due to maintained the momentum of In March, we completed the provide an intuitive, right-first-time delivering our stakeholders’ key the COVID-19 pandemic. I have our transformational Evolve transfer of SLC’s Pension Scheme and trusted service to applicants, priorities. A great deal has been been impressed by the way our Programme. One key achievement to the Civil Service Pension students and repayers, one where achieved and I would like to put leadership team has transformed was the implementation of the Arrangements, a move that has they no longer need to telephone on record my thanks to our staff, our delivery capability from a More Frequent Data Sharing made our pension arrangements or write to us. Our task is to evolve shareholders, Executive Directors largely office-based operation to an project, whereby HM Revenue and both more sustainable for the future into a leaner company with an and Non-Executives for their energy organisation which is substantially Customs (HMRC) provides near and also provides a competitive increasingly skilled workforce, one and dedication throughout the year. home-based. real-time data on the repayments element of the reward package that that our customers will instinctively made by borrowers: this has we are able to offer to our staff. have confidence in. I would in particular like to I would also like to pay tribute to reduced the amounts that have wholeheartedly thank my two the flexibility and adaptability of all The Government’s Tailored Review been over-repaid by customers. A immediate predecessors in the role our staff and their willingness to of SLC – a standard review process second key part of Evolve this year of Chair of the company. For six take on new ways of working. All for all Non-Departmental Public was the development of a facility years, Christian Brodie successfully of this has depended on the rapid Bodies - was published last July. for applicants which enables them led SLC through a period of activation of our business continuity It affirmed the continued strategic to digitally upload the supporting unprecedented growth – in terms of plans and protocols for the rollout value of the company in the delivery evidence for their loan application the number of customers we serve, of technology that has enabled of student finance services for the Peter Lauener (rather than having to post these the number of financial products SLC to safely deal with this year’s UK. We have already implemented Chair items to us). This demonstrates our we provide to students and the size applications for financial support for several of the recommendations commitment to providing the kind of the loan book that we manage. the 2020/21 academic year, and to from that report – for example, of experience that our tech-savvy Professor Andrew Wathey then ably make this transition quickly. the rationalisation of our key customers expect to see in their took up the reins as Interim Chair performance indicators – and made At the time of writing, the pandemic everyday lives. until my appointment. I am deeply progress with many others. I believe is a critical focus for the company. indebted to both, and I am grateful One of our key business objectives that recommendations to work with The two key priorities in SLC’s for the support that they have given for the year was to “improve shareholders to simplify existing response to the ongoing situation me as incoming Chair. financial management through a policy and crucially to bring forward are: to protect the health and well-managed, skilled, engaged and the timetable for commissioning of We are also indebted to Natalie wellbeing of employees, and to properly rewarded workforce”, and new policy will be key to building Elphicke who stepped down as continue to deliver core services to SLC made progress in this area, further success in the future a member of the Board this year, customers. with stronger financial planning through the Evolve Programme. and warmly welcome two new and controls, the establishment members, Charlotte Moar and As we move into the 2020s SLC’s of a new Enterprise Risk and Stephen Tetlow, who both have primary focus will be on doing already provided a wealth of insight to our discussions.
4 5 Chief Executive’s Foreword 02 02 Chief Executive’s Foreword
I am pleased to report that 2019- performing their roles from home, There has, for example, been shape of the company in a way that Our hard work will enable our 20 has been a successful year all with the minimum of disruption major progress in updating our will continue to meet the needs of student customers to invest in their for SLC. We again exceeded the to the services that we continued to underpinning technologies; this our customers, shareholders and futures through higher and further majority of our core business provide to our customers. includes the implementation education partners over several education. I believe that this is an targets and at the same time This success story was of course of a new core HR and financial years ahead. organisation that is quite capable drove forward our strategy to management ERP system, further of continuing to succeed in what underpinned by the dedication of What SLC achieves has not always transform our technology and progress on moving to cloud-based may be challenging times ahead. In staff and the strong leadership and been well communicated, and ever ways of working which will deliver platforms and the deployment these unprecedented times, I want commitment of my colleagues. since I first joined the company, I our goal to provide increasingly of technology which integrates you to know that SLC will be ready I am pleased to have this timely have felt it was important that we intuitive, joined-up and trustworthy our data and processes. We also and able to continue to meet the opportunity to put on record communicate and engage better digital services both to our student further enhanced the security of needs of our customers. my thanks for their remarkable with our customers – with students, customers and to our Government our systems, with the completion achievement in putting SLC onto a applicants – perhaps with their shareholders and partners. of a new data anonymisation stable footing. parents too – and of course also I am proud of how our team has and encryption programme and The last month of this year has with those former students now responded to the challenge posed upgraded cyber defences. And confirmed what I already knew: that repaying their loans. It means by the COVID-19 pandemic. we are poised to deliver major SLC has committed, conscientious communicating better with our Within just a month of the UK improvements in our digital services and resourceful people at all Government shareholders, with Government’s announcement to customers during the months Paula Sussex levels throughout the company. our partners throughout the higher of restrictions for people leaving ahead. Chief Executive This bodes well for the future, and further education sectors, and their homes, over 99% of those as we continue to drive forward This year, there was also good also crucially within our teams and SLC staff whose roles could be together with the operational progress in the implementation of within the company as a whole. We performed from home had been transformation of the company. our People Strategy, developing have made significant progress in provisioned with the necessary During 2019-20 we have already a new set of career pathways this during 2019-20 that will stand equipment and technology to passed major milestones in our supporting the development of the us in good stead for the future, do so. This achievement meant longer-term transformation, the skills that we need for the future, in particular reaching out to our that SLC transitioned from a Evolve Programme, which will build alongside an expanded graduates customers in the forums of their predominantly office-based the capacity of our technology and apprentices programme. choice – whether this is via our organisation to one where 90% of and workforce in order to meet the We have already seen a clear many social media channels or, its 3,500 staff were successfully challenges ahead. improvement in our employee for example, via a new outreach engagement score, and this further programme whereby all my development of “our team” will be a Executive Directors now spend time key focus in the year ahead. For the visiting higher and further education longer-term, we also developed a institutions across the UK to spend new Workforce Strategy, which now time talking to students and Higher provides a comprehensive roadmap and Further Education providers. for achieving the future size and
6 7 03 The Strategic Report
Contents
3.1 About SLC 10 3.2 Core Business 11 3.3 Performance 12 3.4 Strategic Challenges 21
3.5 Environment, Sustainability and Corporate Responsibility 25 3.6 Risk 27 3.7 Financial Review 28
8 9 The Strategic Report 03
3.1 3.2 About SLC Core Business SLC's Mission SLC is a UK public sector Memphis Building, Lingfield Point, Wales – these are in Darlington and services for Scotland and Northern contingent repayment” (ICR) organisation established to provide McMullen Road, Darlington, DL1 Llandudno Junction respectively. “We enable people to Ireland. Additionally, Northern loans and works in partnership financial services (in the form of 1RW. The company is wholly in invest in their futures SLC’s Chief Executive leads a team Ireland’s Education Authority with HMRC to collect repayments loans and grants) to approximately public ownership; the four UK of six Executive Directors – her through further and uses SLC-developed systems through PAYE and self-assessment; two million new and returning Government Administrations are its Executive Leadership Team (ELT) – for assessing their students’ the company directly collects students annually in colleges shareholders. Since April 1996 SLC higher education by each heading up a Directorate with applications. In recent years, repayments from those borrowers and universities across England, has been classified as an executive providing trusted, a mix of employees from across England, Wales and Northern outside the UK tax system. SLC Northern Ireland, Scotland and non-departmental public body SLC’s offices in England, Scotland transparent flexible Ireland have each developed also provides a direct-debit option Wales. (NDPB). and Wales. and accessible student varying finance products for for all customers, and actively SLC is a non-profit making SLC operates from five offices postgraduate students, covering encourages those borrowers Further information on both SLC’s finance services.” organisation. SLC was incorporated across the UK: there are two in both Masters and Doctoral degrees. who are nearing the end of their Executive and Non-Executive in 1989 as a company limited Glasgow city centre, plus one in These have added to the mix of repayment term to use this facility, Directors is provided in the by shares under the Companies nearby Hillington, and there are services delivered by SLC. as it allows the company to manage Governance Statement (Chapter 5 Act with its registered office at two further offices in England and the remaining balance in real- of this report). SLC also manages a growing range time and thus removes the risk of SLC is one of HM Government’s of products for students in further incorrect PAYE deductions which SLC’s Executive Leadership Team (ELT) is set out below. (HMG) key strategic delivery education. These also are tailored would otherwise result in customers partners and the Department for to the differing requirements over-repaying their loans. SLC and Education’s (DfE’s) largest partner of individual Government HMRC service the entire ICR loan- organisation by headcount. HMG Administrations – from Advanced book, which is partly owned by relies on the company to assess Learner Loans in England, through HMG and partly owned by private applications from approximately to the Welsh Government Learning investors. two million new and returning Grant; Northern Ireland and Wales students each year; manage a both continue to offer Education Technology growing loan book (£156.5 billion Maintenance Allowance. In order to support the provision of at 31 March 2020*); work in SLC administers various targeted the administrations’ student policy partnership with HMRC to collect Paula Sussex Product, Customer Operations Repayments and support grants designed to enable and products, SLC purchases, repayments; and manage a total Chief Executive and External Relations Counter Fraud Services people with disabilities, childcare designs, builds and maintains Derek Ross customer base of over nine million (PCER) Executive Director (R&CF) responsibility, adult dependants or software, databases and web- individuals. David Wallace Bernice McNaught other needs to overcome barriers interfaces. The company is on a Executive Director - Executive Director - also Apply-to-Pay (”A2P”) to participation in higher and further journey to deliver a sustainable and (also Deputy Chief SRO for Evolve Services education. Additionally, SLC pays resilient technology architecture. Executive and Chief bursaries to students on behalf of Customer Officer) This will form a strong, efficient and SLC provides a range of different many UK education providers. enabling technology foundation, services for students throughout During 2019-20, SLC disbursed upon which the SLC can ultimately the UK which vary according to the £10.56 billion in tuition fee deliver an outstanding customer requirements of each of the four payments and £9.47 billion in loans experience. A substantial portion of Government shareholders. for living costs and grants. the Technology Strategy is delivered For England and Wales, SLC via the Evolve transformation manages the full, end-to-end Repayment Services programme, providing the “apply, assess, pay and repay” appropriate governance and process for undergraduates SLC administers repayment oversight to ensure alignment studying on a full-time and part- services on behalf of all four UK across strategic initiatives. Technology Group (TG) Chief Financial Officer People time basis; it provides elements administrations. SLC services a Stephen Campbell (CFO) Morven Spalding of the payment and repayment growing loan book of “income- Executive Director Jacqui Smillie Executive Director Executive Director
* The value of the Loan Book represents the face value of the total loan book, and not the value in accounting terms which is included in the DfE Consolidated Annual Report and Accounts, and not within the SLC Annual Report & Accounts
10 11 The Strategic Report 03
3.3 The Annual Performance Full results against the year’s APRA 3.3 and Resource Agreement targets are shown in the tables Performance below. For comparison, 2018-19 Performance (APRA) results are also shown for those Key Business Objective 1- Customer Focus Government affirms SLC’s role and where equivalent metrics were in “Deliver a great customer service based on an core responsibilities each year in place last year. the APRA letter. This letter also increased digital offering, decreasing avoidable There are clear links between the confirms the company’s annual contact and ensuring compliance with data protection risks and uncertainties facing budget and outlines a set of key an organisation to the level of regulations and cyber-security best practice.” performance targets that it expects performance targeted or attained SLC to meet – the APRA targets. in its KPIs. SLC strives to balance Despite a growing number of these carefully; for example, while customers, a rapidly increasing seeking to improve processing loan book and a complex set of times the company has at the 3.3.1 Customer Satisfaction Results tailored finance products, SLC same time remained vigilant in has yet again achieved a good SLC commissions independent surveys of customer opinion on a variety of mitigating against key risks relating level of success against the APRA topics each month. As part of each survey, customers are regularly asked to cyber security and information targets set by Government. SLC to rate the company’s overall service with a mark out of ten. These scores and data handling. Performance reports against these targets using are usually aggregated as a 12-month rolling average and expressed as a and risk reporting are both aligned a modified RAG-scale; each metric percentage. to the company’s Key Business has individual thresholds defined for Objectives, and all KPIs and risks performance, in four bands: 90% have clear ownership at Executive FY19-20 green (above target) level. FY18-19
green-amber (adequate) 84.10% 80% amber-red (of concern) 80.70% red (below target) Customer 73.0% 73.10% The full year outturn for SLC’s 16 Satisfaction 70% APRA performance measures was: • 9 metrics reported green • 3 metrics reported green-amber 60% • 2 metrics reported amber-red • 1 metrics reported red Applicants and Students Repayers • 1 metric reported without RAG- status (no target set for 2019-20 in the APRA) 2019-20 2018-19
Customer Satisfaction Green Score RAG Status Score Target
How applicants and students rated the 80.70% ≥85% 84.10% company’s overall service GREEN-AMBER How those in repayment rated the 73% ≥73.5% 73.10% company’s overall service GREEN-AMBER
12 13 The Strategic Report 03
3.3 The company was initially unable to renew its contract with an independent FY19-20 90% 3.3 survey partner during the first five months of 2019-20, and therefore this FY18-19 Performance year’s satisfaction results only cover the latter seven months of the year. Performance This is likely, partly, to explain the apparent drop in applicant and students’ 80% satisfaction – (given that many customers whose applications were processed very quickly – i.e. at the beginning of the year – will have been excluded from the survey results). However, the company also recognises Avoidable that some dissatisfaction related to slightly longer timescales for some Contact application assessments during 2019-20. This also aligns with results from Performance 70% other relevant performance metrics, including the Complaints metric below. 65.60% 65.20%
60% FY19-20 20,000 Undergraduate Applications (%)
Number of
Complaints 1.28 FY19-20 5 10,000 Received, FY18-19 per 10,000 4 customers
3.33 3 0.17 Avoidable 0 2.54 2 Applicants Repayers Contact and Students Performance 1
2019-20 2018-19 0 Number of Complaints Received, Green per 10,000 Customers Score RAG Status Score All Applications (average) Target
Complaints from applicants 1.28 ≥1.0 N/A and students RED 2019-20 2018-19
Avoidable Contact Performance Green Complaints from those in repayments 0.17 ≥0.2 N/A Score RAG Status Score GREEN Target Percentage of undergraduate applications processed without 65.60% ≥66% 65.20% any incoming telephone call GREEN-AMBER
Average number of incoming 2.54 ≥2.56 3.33 phone-calls for each application GREEN
The company has made sustained progress in reducing the need for customers to telephone, with the average number of incoming calls per application falling to 2.5 during 2019-20 (compared to 3.3 over the previous year).
14 15 The Strategic Report 03
3.3 3.3 Performance Performance Key Business Objective 2 - Key Business Objective 3 - Apply-to-Pay (A2P) PrProcessingocessing Repayment and Loan Book “Thr“Throughough each academic cycle, ensureensure that existing “Increase repayment compliance, administer the loan prproducts arearoducts delivere delivered secured securelyely, ef, effectivelyfectively,, sustainably book effectively and efficiently, deliver post loan sale and efand efficientlyficiently.”.” obligations and support future sales.”
100% FY19-20 FY19-20 100% FY18-19 FY18-19 97.70% 97.20% 89.50% 90.20%
87.10% N/A A2P 95.4% 50% 50% 96.1% 95.6% 92.2% Repayment Processing Compliance Performance Performance
0% 0% England Wales NI Applications Confirmed Past Cohorts Incoming Cohorts “ready to pay” % Incoming Calls Answered
2019-20 2018-19 2019-20 2018-19 Repayment Compliance Performance A2P Processing Performance Green Green Score RAG Status Score Score RAG Status Score Target Target
Applications confirmed “ready to pay” Percentage of borrowers from past cohorts who 89.50% ≥ 91% N/A within 70 calendar days of receipt are compliant with their repayment obligations. AMBER-RED 90.20% ≥89.5% 87.10% (“Past cohorts” means all ICR cohorts with an 96.1% for England; GREEN SRDD* before April 2020) Percentage of incoming phone-calls 95.6% for Wales; 95.40% ≥90% answered 92.2% within 60 seconds GREEN for Northern Ireland Incoming Cohort: percentage of the new cohort of borrowers - (i.e. those whose SRDD* will be in April 2020) – who have successfully been matched 97.70% ≥97% 97.20% SLC’s new target for end-to-end processing - 91% of applications to an HMRC or an SLC repayment channel. (This GREEN ready to pay within 70 calendar days was not quite met – the company is monitored from November to March each year) achieved 89.5% within the target timescale. This year’s discontinuation of * SRDD = Statutory Repayment Due Date – the point at which former students would become due to begin making repayments the automatic roll-over process for applications from returning students if their earnings were sufficient. contributed to this. Achieving 90% borrower compliance during 2019-20 was a significant Despite being unable to accelerate processing times this year, SLC milestone and achievement for SLC; this success reflects considerable work nevertheless again successfully made accurate and timely payments to over on analysing and segmenting the loan book, with projects tailored for improving 99% of students and Higher and Further Education providers within target compliance within specific groups of customers, or borrowers residing in timescales. specific countries overseas.
16 17 The Strategic Report 03
3.3 SLC manages an overall Change agenda which is comprised of five 3.3 portfolios, namely Policy, Technology, Repayments, Corporate and Evolve. Performance These are rolled up and reported at an overall ‘all portfolio’ level. New Performance Key Business Objective 4 - metrics were introduced in 2019-20 with a view to assessing performance of Delivering Change SLC’s change portfolios in terms of time, cost and quality of delivery. In addition, two further measures were introduced to assess the stability “Manage change projects in a timely manner, balancing of the change programme and benefits realisation. It has been clear during lowest practical cost with the need for achieving quality the year that the level of stability (as measured by the number of externally outcomes and agreed benefits.” driven technical change release notes) has been less than would be desired. This has, in turn, impacted time and cost of deliveries.The metrics were strictly numeric, based on the original budget and timetable for each project, and did not take account of in-year changes to the scope or scale FY19-20 100% of projects even if that change was requested by Government or other FY18-19 stakeholders. The new metrics have also provided management with insight on some fundamental issues faced by SLC relating to the current timing of the budget setting process for change portfolios not being properly aligned with the 68.40% 50% Discovery and Inception phases of project delivery. New, more appropriate 57.40% N/A N/A Change reporting has been agreed for the following 2020-21 financial year which will Portfolio also include the implementation of a more rigorous benefits maturity model. Performance In addition, in respect of the Policy Portfolio, SLC and its shareholders have developed workstreams with the Evolve transformation programme both to simplify existing student finance regulations and, crucially, to re-timetable 0% the standard policy commissioning process (incrementally over the next two years) in a way that will allow SLC to better deliver and manage time, cost Projects to Budgets Benefits Defined and quality more effectively within change portfolios.
2019-20 2018-19
Change Portfolio Performance Green Score RAG Status Score Target
Percentage of change projects 57.40% ≥ 80% N/A to budget AMBER-RED Percentage of change projects with No target 68.40% N/A N/A agreed benefits defined in APRA
18 19 The Strategic Report 03
3.3 3.4 Performance Managing Complexity systems to manage the near annual Strategic Challenges and Growth introduction of new products and regulations. This usually requires Key Business Objective 5 - SLC operates in a complicated and significant systems development Public Money, Governance and People ever-changing policy landscape, work to challenging deadlines, which has seen the number of against a backdrop of year-on-year “Improve financial management and compliance products and services offered by increases in the numbers of both with government and other controls, through a well- the company almost double in applicants and repayers and further the last six years alone. The four diversification of shareholders’ managed, skilled, engaged and properly rewarded UK Governments’ regulations policy requirements. workforce.” associated with student finance are detailed and complex. Different loan Technology and grant products can each have There has been historic distinct eligibility criteria; there are underdevelopment of many 2019-20 often complex entitlement rules as legacy systems, often because to the amount of financial support Staff Turnover Green the organisation has needed to Score RAG Status available; and different repayment Target prioritise the delivery of each year’s terms, income thresholds and new policy changes ahead of the Staff Turnover – (total leavers interest rates are in force. internal investment in time and across the year as a percentage Customers can be repaying more 13.1% ≥18% manpower required to upgrade of the average monthly GREEN than one loan at the same time, and core systems. Consequently, headcount) these may be on different terms. systems have often evolved in a Delivering each administration’s tactical piecemeal manner, with policy priorities – whether to provide multiple interdependencies that 2019-20 2018-19 new products and services or to increasingly complicate the process Budget Variance Year End Year End refine existing ones – is a core part of developing new products and Green Target RAG Status Variance Variance of SLC’s remit. It seems unlikely services, and of maintaining the that Ministers across the four UK existing estate. -9.42% Administration Budget Variance 4.91% (£2.04m) ≥ 0% & ≤+10% Government administrations will (-£4.02m) This technical debt, combined with GREEN demand less of SLC in the years a customer base that is digitally to come. The independent panel of -2.69% fluent means that the company Programme Budget Variance 0.46% (£0.78m) ≥ -5% & ≤+5% the Review of Post-18 Education (-£5.48m) now needs to put major effort into GREEN and Funding led by Philip Augar upgrading its applications and 22.85% has reported its recommendations Capital Budget Variance 0.19% (£2.80m) ≥ -5% & ≤+5% associated technologies, in order (£11.00m) earlier this year; if the Government GREEN to bring them up to the standard were to choose to take any of these that today’s customers expect as a forward, SLC would be required matter of course and to make the SLC has succeeded in reducing turnover within many grade 1 and 2 to free up significant capacity in technology resilient. The scale and positions, having secured funding for the implementation of the Real Living its future change programmes to sensitivity of the customer data that Wage which has had a historic effect, on some areas of the organisation deliver them. more than others. There was also sustained progress against the the company processes also mean implementation of the company’s People Strategy during the year. SLC has comparable size and that it is critical that SLC maintains complexity to a small to medium a focus on, and continues to invest During 2018-19 the reclassification of some elements of expenditure retail bank; however, unlike in, cyber security. between capital, programme and administration led to SLC being unable a bank SLC cannot pick and In the past, SLC was successful to meet its budget variance targets. With the renewed and sustained choose between customers or in recruiting and retaining staff of focus on compliance with HM Treasury budgeting guidance during 2019- market segments, rather, it is enough experience and skill to be 20, alongside strengthened financial management (and a revised budget responsible for a universal service able to keep pace with the growing settlement at Q2 that addressed the organisation’s finances in terms of for all customer groups, subject demands of the UK’s student administration, programme and capital), this year all three measures have to the eligibility rules set by each finance system. But this has reported at green. Government administration. For become increasingly difficult several years SLC has built new
20 21 The Strategic Report 03
3.4 over recent years. Despite SLC’s can function with the majority of performance targets and milestones do so easily through their channel 3.4 success in reducing staff turnover its staff based at home and made for the year ahead, these are clearly of choice and will have their query Strategic Challenges within many grade 1 and 2 this transition quickly. This was a no longer appropriate in the current, resolved by experts with full access Strategic Challenges postions, rates of pay for some significant change for SLC, both unprecedented circumstances, and to all required information. SLC staff have still fallen behind from a technological and a cultural shareholders decided to remove SLC will deploy sentiment both public sector and private perspective. them for the 2020-21 financial year. analysis tools to monitor customer sector comparators, leading to Nevertheless, the company will The company has made sensible experience at key points in the high turnover and the loss of continue to measure performance adjustments to projects within the customer journey and will use this experienced staff with valuable against its core metrics and will change programmes that were to continually improve the services corporate knowledge. This has endeavour to maintain progress originally planned for 2020-21, but provided. been clearly demonstrated as against the original targets. will continue to progress these, a major factor in surveys of albeit to new timetables in some SLC’s response to the long- Enabler of Opportunity employee engagement and cases. For example, the launch of standing challenges outlined above organisational health. SLC will be recognised as an the Online Repayments Service is articulated at high level within its enabler of student opportunity, Political, Social and (ORS) was rescheduled from April Vision Statement which is that: delivering strong social value on to July 2020, in order to mitigate the “SLC is widely recognised as behalf of shareholders. This will Economic Considerations risk of increased incoming contact enabling student opportunity and continue to be based on a clear in quarter one. The company may have to change delivering an outstanding customer understanding of objective to course in response to new political Conversely a number of projects experience in the efficient delivery provide student finance reliably and and economic realities: these may within the Technology Workforce of the four UK Governments’ further securely, helping customers invest arise as a result of UK-specific Mobility programme have been and higher education finance in their futures and supporting the processes, such as spending brought forward to facilitate policies” long-term economic growth of the reviews, Brexit, general elections the transition to home working. UK economy. In executing that As well as the statement above, or a possible second Scottish These include the accelerated core mission, the company will be the vision is underpinned by five independence referendum; or from rollout of new devices and the viewed as competent, especially themes. These are the foundations the performance of the global implementation of Windows 10 in our responsibility to maximise of this Strategy – the company’s economy as a whole, and its impact and Microsoft Teams Exchange. use of and safeguard the taxpayer key, longer-term strategic goals: on labour markets or interest rates. The Technology Group business pound. Demographics and new modes of plan includes a new goal, to rapidly An Outstanding Customer learning and employment may all stand up remote working and Leaner, Better, Doing More interact with these factors. SLC has to support it for the remainder of Experience for Less commissioned detailed planning the year. SLC will deliver intuitive, seamless SLC will deliver student finance and workforce modelling for several and transparent services aligned to SLC promptly invoked its Business services safely through flexible, macro environmental scenarios as the relevant part of their customer Continuity Plan in response to the sustainable, and inherently secure part of its People Strategy. journey. The company will work to situation and has taken extensive technology solutions. Emerging ensure that students have access The COVID-19 Pandemic steps to enable most staff to opportunities, driven by advances to trusted student finance expertise, work from home, while new office across the technology sector will Initially, COVID-19 had a significant providing clear, comprehensive protocols covering for example be exploited to optimise delivery, impact on the company as it and easily accessible advice, and social distancing and extra cleaning provide a lower total cost of transitioned to home-working, but will maintain a strongly-engaged have allowed a minimum essential ownership and help protect SLC our original planning for the coming and collaborative relationship with team to be able to work safely in from cyber-attacks. year remains largely unchanged. company premises. In this way Higher Education Institutions (HEIs) to support SLC’s commitment The two key priorities in SLC’s the company has been successful SLC will have confidence in the to providing the best possible response to the situation are: in maintaining critical services, accuracy and integrity of its data, including continued, timely and customer experience over the aligned to the customer and user 1. To protect the health and accurate payments both to whole student life-cycle. needs. Real-time understanding wellbeing of our employees students and to Higher and Further SLC systems will ensure that clear of our consolidated data will 2. To continue to deliver critical Education providers. and accessible information and improve operational efficiency services to our customers application / payment interfaces and performance and enable the Although SLC and shareholders are available allowing customers creation of new KPIs based on key SLC has safely and securely had, as part of the standard to interact or self-serve in a fully outcomes. transitioned a predominantly office- business planning cycle, already informed way. If they must contact based organisation into one that agreed detailed and specific the company, they will be able to
22 23 The Strategic Report 03
3.4 The company will continue to policy intent with efficient delivery SLC takes seriously its deregistration in the Glasgow 3.5 develop a culture of continuous and proven, tested customer responsibility to operate in an Bothwell Street office, however Strategic Challenges improvement through lean, straight needs. SLC and policy teams in DfE environmentally aware and the removal of the cooling towers Environment, through, standardised processes. and the devolved administrations sustainable manner. should see improvement in Sustainability SLC will automate or outsource will work in a joined-up way, coming years. Emissions high volume, low complexity activity underpinned by robust governance * TM44 is the Chartered Institute of Building and Corporate while moving to become a smaller of the policy development and The company’s electricity emissions Services Engineers’ (CIBSE) Technical Responsibility centre of excellence to manage commissioning process tied for 2019-20 were calculated at Memorandum number 44 covering the more complex work. to clearer, achievable delivery statutory inspection of air conditioning 1,760 tonnes. The increased use of systems. timelines. The new Establishment Oversight passive infrared sensors for lighting Committee is responsible for in Darlington has contributed to a Evolve significant reduction – a comparison Embedding Sustainable ensuring that there is governance Procurement and oversight in place to prevent The company has developed between January 2019 and January unplanned headcount increases a refreshed transformation 2020 suggests a monthly 30,000 SLC is committed to embedding and preserve the integrity of the programme, Evolve, to achieve kw/hour saving there. Business sustainable procurement by: agreed and authorised annual these strategic goals within a travel emissions have benefitted ensuring that environmental, social budgets. timeframe stretching up to five from the use of hybrid vehicles, with and whole life cost impacts are years ahead. Evolve is designed emissions of 201 tonnes of CO2. taken into consideration in the A Great Place to Work to enable the company to react Fugitive emissions totalled 8.48kg assessment of value for money, quickly to the uncertainties in across all sites. SLC will be an outstanding including the consideration the wider political and economic place to work and to develop. SLC is currently compiling a of fairly traded goods; by environment in which it operates. Implementation of a comprehensive TM44* Air Conditioning Efficiency undertaking sustainability risk/ SLC has also defined key business People Strategy will create a more Report, which will cover the energy impact assessments of products objectives covering just the year skilled, motivated and engaged efficiency of all sites and will and services to be purchased; ahead, (see the company’s one- workforce, aligned to current underpin the next statutory 5-year by working with new and year Business Plan for these). and future organisational needs. report which is due next year. existing suppliers to encourage While the company may need to An improved employer brand, consideration of the social and scale back or pause some ‘non- underpinned by a stronger external environmental impacts of their critical’ aspects of its service and Waste Minimisation and reputation, will help the company to services and activities alongside change programme as a result Management retain and attract good people. The compliance with national standards; of the COVID-19 pandemic, SLC mission and vision will be delivered SLC produced 338.27 tonnes of by forging links with the local remains fully committed to the through the People Strategy built waste from all sites. 11.91 tonnes community to encourage positive full Evolve programme, and in the on simple, fair and consistently of this was general waste sent to participation and address barriers year ahead significant and genuine adhered to policies and processes landfill; 131.70 tonnes were sent to to entry to encourage local, transformation of the company and fair and attractive reward a material recycling facility. 194.67 regional, SME and ethnic minority will lay the foundations both for and recognition for colleagues. tonnes of waste were sent to an suppliers to bid for SLC contracts; improvements in customer service Tailored skills development and energy from waste facility. A new and by supporting the drive to and reduction in cost. career progression will be core third-party contract has achieved achieve carbon emission reduction components in building talent, as A key component of this is a better level of recycling across targets. discussed within the Remuneration the Customer Engagement all of company sites – for example There is a balance between and Staff Report (Section 4). Management (CEM) programme, this year’s 11.91 tonnes to landfill these factors and the overall with goals to provide online compares with 53 tonnes in need to achieve value for money. Trusted Delivery Partner processing wherever possible, 2018-19. The scope to take account of Shareholders will see SLC as a intuitive online capability for environmental and sustainability trusted partner in the efficient customers and real time data Finite Resources issues is restricted to a strict set of that either allows self-service or circumstances in line with UK policy and agile delivery of Government SLC’s water consumption was enables staff to provide a “right and EU regulations. policy and taxpayers will trust the 7,160.38 m3 for the full estate. This first time” service. Improved digital company’s stewardship of their was an increase on the previous self-service for customers will money. The company will support year due to the necessary meter shareholders to simplify and greatly reduce incoming contact by rationalise the policy landscape telephone and mail. wherever possible, better aligning
24 25 The Strategic Report 03
3.5 Modern Slavery Act Anti-Fraud and Anti- Risk Information and Data 3.6 Environment, In line with section 54 of the Corruption The COVID-19 pandemic has had a Handling Principal Risks Modern Slavery Act 2015, SLC is SLC is committed to combatting significant impact on the company Information is an important asset Sustainability committed to the highest level of fraud and corruption in all its and is clearly both the principal at SLC which must be adequately and Corporate ethical standards and has a zero- activities. The company’s Anti- risk and principal issue facing the protected to ensure the integrity tolerance policy towards modern Fraud and Corruption Policy company, as further detailed in of data (i.e. quality and accuracy) Responsibility slavery and human trafficking. The sets out its overall position, with Section 3.4, Strategic Challenges and to ensure that personal data is company is committed to acting due regard to relevant legislation (above). Beyond the pandemic, the handled and stored appropriately. ethically and with integrity in all including (but not limited to) the principal risks facing the company If data is handled inappropriately, it business dealings and to taking 2006 Fraud Act, the 2010 Bribery are: may lead to a breach of legislative steps to ensure that modern slavery Act and Scots common law relating or regulatory requirements. This risk and human trafficking do not exist to “fraud and uttering”. The policy Disaster Recovery (DR) exposure continues to be reduced in any part of the business or its affirms SLC’s commitment to the Effective DR arrangements are by the delivery of key initiatives as supply chains. SLC’s statement on Nolan Principles of Public Life. vital to safeguarding continuous part of the General Data Protection modern slavery can be viewed at The company maintains additional and effective customer service Regulations (GDPR) Compliance www.gov.uk/slc. related policies, for example a arrangements. If SLC’s DR Programme, covering information Whistleblowing Policy and a Gifts arrangements are not capable and data handling. SLC People and Hospitality Policy. Regular of returning critical services in training is provided for employees, line with business requirements, SLC has an established including on money laundering there will be business disruption commitment to Equality, Diversity regulations and data protection. and customers may be impacted and Inclusion (EDI), and publishes detrimentally. A programme an EDI Annual Report alongside the plan has been developed and is statutory gender pay gap report, proceeding to implement technical both at www.gov.uk/slc. Gender solutions to remediate DR issues, analysis on SLC Board Members, in line with a detailed assessment Directors and Staff is included and recommendations made by our within the Remuneration and Staff third-party partner. Report (Section 4). Cyber Security The dynamic nature of cyber risk is such that SLC must always be vigilant. If systems are not sufficiently protected, confidentiality may be compromised and without preventative action, a cyber-attack may lead to data loss and/or business disruption. SLC recognises that this is an inherent risk which the company will be exposed to long term and it continually reviews the appropriateness of mitigations. Specifically, this includes the SLC Security Programme, which has a focus on data anonymisation and further strengthening cyber defences.
26 27 The Strategic Report 03
3.7 Grant-in-Aid Funding Year-End Outturn 3.7 Financial Review SLC is primarily funded through Grant-in-Aid, received from DfE as SLC’s Financial Review sponsor department. DfE receives appropriate apportionments of this The overall outturn was £285.1m (2019 adjusted: £264.2m), an underspend funding from the three Devolved Administrations: of £3.0m (2019 adjusted overspend: £1.8m) against the APRA budget, as shown in below: • The Welsh Government • The Scottish Government 3.7.2. Final budget outturn position of net expenditure • Department for the Economy, Northern Ireland 2019-20 2018-19 restated The same funding is also analysed through the “parliamentary lens” – that is, by Admin, Programme and Capital, as defined in HM Treasury’s (rounded to the nearest Budget Outturn Variance Budget Outturn Variance Consolidated Budgeting Guidance (CBG). £100,000) £’000 £’000 £’000 £’000 £’000 £’000 DfE confirmed SLC’s budget in the APRA letter, which provided analysis of Non-Ringfenced (Cash) 251,700 249,300 2,400 229,200 226,800 2,400 the funds through both the business and the parliamentary lenses. Ringfenced (Non-cash) 36,400 35,800* 600 33,200 37,400 (4,200) 3.7.1. UK Funding for Delivery of SLC Core Activities and Change Projects Total DEL 288,100 285,100 3,000 262,400 264,200 (1,800)
(to nearest £100,000) Operating Business Change & Total Expenditure Optimisation Strategy 3.7.3. Reconciliation to Statement of Comprehensive Net Expenditure and Programme Maintenance Reconciliation to Financial Statements 2018-19 2019-20 (rounded to the nearest £100,000) Restated 2019-20 £’000 £’000 £’000 £’000 Total expenditure per SOCNE: £’000 £’000 Non-ringfenced (Cash) 159,300 6,600 85,800 251,700 Staff and restructuring costs 68,700 98,900 Ringfenced (Non-cash) 36,400 - - 36,400 Depreciation, amortisation and impairments 41,100 34,300 Total 195,700 6,600 85,800 288,100 Other administrative expenses 83,900 90,600 2018-19 Finance costs 1,700 1,100 Non-ringfenced (Cash) 138,500 10,000 80,700 229,200 195,400 224,900 Ringfenced (Non-cash) 33,200 - - 33,200
Total 171,700 10,000 80,700 262,400 Non Grant-in-Aid income (note 3) (1,300) (1,000) Cash Grant-in-Aid Funding Capital expenditure 40,900 37,400 Cash Grant-in-Aid funding is allocated each year from the original Add back: AME income recognised in SOCNE 55,000 2,900 Departmental Expenditure Limit (DEL) which consists of two separate IFRS 16 impact on expenditure (note 1.2) (4,900) - budgets: net resource spending (resource DEL) split into Admin and Programme expenditure; and net Capital expenditure (capital DEL). The cash Total Outturn 285,100 264,200 element of the funding of DEL in 2019-20 was £251.7m (2019: £229.2m). *The depreciation figure of £35.8m above excludes the adjustment to depreciation arising from the IFRS 16 adjustment Non-cash DEL Grant-in-Aid Funding through property, plant and equipment for right of use assets which were introduced this year in order to comply with IFRS 16. The treatment in this financial review section of the Annual Report and Accounts is due to DfE reporting and Non-cash funding also contains two budgets. Ring-fenced DEL comprises budgetary requirements which specifically exclude IFRS 16 from calculations until the year ended 31 March 2022 when non-cash expenditure such as depreciation. The non-cash element of the department will require to have full budgetary measures in place. funding amounted to £36.4m in 2019-20 (2019: £33.2m).
28 29 The Strategic Report 03
3.7 Staff numbers and salary costs forward cost and brought forward • In estates costs, rent, rates and Financial Risks and 3.7 aggregate depreciation and service charges have remained • The impact of the low pay case Challenges Financial Review amortisation. consistent since 2018-19. Financial Review in Operations (c. 1,900 staff at Changes to the provisions for 2020-21 funding has been provided Grades 1 to 3) during the financial • Following the full desktop review, dilapidation are considered as a “flat cash” settlement to SLC year resulted in an increase in a prior year adjustment has in the non-cash AME funding which is broadly in line with 2019- salary costs of £3.3m. been calculated with full details and are detailed in note 15 in 20 funding. The APRA letter for included in note 19. As a result, • There has also been an 6.5% the accounts. Small savings of 2020-21 sets out a small (£0.7m) the corresponding brought increase in average FTE staff £0.4m were made in security increase against 2019-20 across forward cost and associated numbers since last year – from and property insurance and Programme (£169.2m to £169.9m) aggregate depreciation have both 3,105 to 3,308. This has had a maintenance. and Capital (£40.9m to £41.0m) fallen by £29m. The remaining corresponding impact on the budgets, with Administration asset register will now be subject • Postage, stationery and office level of salaries. Operations staff budget unchanged (at £41.5m). to regular review. costs increased by £0.7m had previously faced significant The main challenge SLC has faced with annual price increases to recruitment and retention issues • Amortisation for intangible has been to produce a balanced contracts and the introduction during 2018-19, and so the assets increased in line with budget to meet the priorities of the of third-party costs under the staff numbers in this area have an additional £24.8m internally organisation, including delivery of Childcare grants project which increased in 2019-20. generated software assets being a sizeable Evolve transformation added an additional £0.4m of capitalised during the year. These programme, against the “flat • Additional costs from the low costs. assets represent completed cash” funding position. SLC has pay business case, increased developments during the year. completed a re-prioritisation staff numbers and additional of planned activities and made contributions to the SLC Pension • Work conducted to date on a some difficult decisions to ensure Scheme has resulted in an overall Repayments Calculator was successful delivery and affordability staff costs increased from £98.9m assessed for impairment during of key priorities. to £111m. the financial year, and a value of £240,000 was written off • The one-off gain on settlement under intangible assets under adjustment on the transfer of the development. pension fund of £42.3m reduced Non-cash AME Grant-in-Aid Funding the total staff and restructuring • Computer equipment and costs figure to £68.7m. software licences were also Annually Managed Expenditure (AME) covers expenditure which cannot be impaired during the year for items fully controlled. This is contained within the Programme budget each year. Depreciation, amortisation and considered to no longer be in use The non-cash element of funding granted by DfE amounted to £5m credit impairments as at 31 March 2020. funding in 2019-20 (2019: £33.2m debit) due to the expected budgeting for the transfer of the pension scheme. • Depreciation for the year • No additional impairment to the increased for property, plant and value of SLC’s non-current assets equipment from £5.1m in 2018- was deemed necessary. AME Expenditure 19 to £9.5m in 2019-20. This was 2018-19 2019-20 mostly due to SLC’s adoption of Other Administrative Expenses restated IFRS 16, with a corresponding • Other administrative expenses fell adjustment in depreciation for (rounded to the nearest £100,000) £’000 £’000 by £6.7m from £90.6m to £83.9m. right of use assets for all the Costs for supplier partner IAS 19 pension costs* (50,900) (1,000) property leases previously held resource reduced by £11m within operating costs. Impairments (500) (1,300) reflecting a drop back from the • During the year, an exercise was higher levels of expenditure on Movement in provisions (3,600) (600) undertaken to assess all non- the underlying infrastructure for current assets held at nil book SLC’s existing systems in 2018- Total AME (Income)/Expenditure (55,000) (2,900) value as at 31 March 2020 in 19. However, costs on outsourced order to identify those assets call handling, business service * this represents interest costs of £1.4m (2018-19: £1.1m), a credit to employer which were no longer in use and and technology operations rose in contributions of £17.6m (2018-19: £11.5m), other staff costs of £7.6m (2018-19: had been disposed of during total by £12.9m. £9.4m) and a credit of a gain on settlement of £42.3m (2018-19: £nil) as detailed in the previous year. These assets the reconciliation table in note 16. comprised £45m of brought
30 31 The Strategic Report 03
3.7 Non-Grant-in-Aid Funding Pension Scheme this budget and subject to separate Supplier Payment Policy 3.7 DfE approval. During the 2019- Financial Review SLC continued to receive other As stated in the Remuneration 20 financial year, the budget was SLC aims to comply with the Financial Review income amounting to £1,078,000 Report, on 1 March 2020 SLC increased to £130,000. SLC spent Government’s Better Payment (2019: £609,000) from those became a member of the Civil a total of £126,000 during the year Practice Code. 94% (2019: 98%) universities and colleges that Service Pension Arrangements and (2019: £102,052). One additional of invoices were paid within the choose to have SLC administer made the alpha and partnership exceptional ex-gratia payment was normal trading terms of 30 days, their bursaries and scholarship schemes available to all its requested to be made by DfE for with 43% (2019: 61%) being paid payments under the Higher employees. The pension schemes almost £11,000 which, as such, within 5 days. Education Bursary and Scholarship are unfunded and no liability rests came under the budget for special Scheme. Further income was with SLC. Employee contributions payments. Declaration and Signature received from third parties in are salary-related, with details of relation to the historic sales the scheme reflected in the notes to The largest increase in complaints This Strategic Report forms of Mortgage Style Loans; this the accounts. arose from core application only part of the annual company amounted to £121,000 (2019: processing and an increase in the accounts and reports that SLC Due to the pension transfer £118,000). amount paid following Independent publishes online at www.gov.uk/ arrangement made mid-year, the Assessment (IA). In the first 9 slc. Directors have had full regard pension deficit of £31.1m has Prior Period Adjustments months of 2018-19 £18,400 for to the considerations set out in changed to a £10.6m surplus IAs was paid out, and in the first Section 172 Companies Act 2006 Prior year comparatives have been with only deferred members and 9 months of 2019-20 this had when fulfilling their duty to promote restated following a reassessment pensioners remaining in the residual increased to £25,400. This has the success of the company, these of the treatment of Grant-in-Aid scheme as at 31 March 2020. been driven by a small number of being: and the review of non-current Further information is reflected in higher than usual awards - some • The likely consequences of any assets as stated above. Disposals the pension note to the accounts of which stem from 2017-18 and decision in the long term were adjusted retrospectively for and in wages and salaries figures in 2018-19 but, due to legal issues, computer equipment, furniture the Remuneration and Staff Report were not paid until 2019-20. • The interests of the company’s fixture and fittings and licences to show the relevant settlement employees gain realised. for brought forward costs and Fees and Charges • The need to foster the company’s associated depreciation and The transfer of the pension scheme business relationships with SLC does not receive any fees and amortisation of £26.9m, £1.7m and resulted in a settlement payment suppliers, customers and others £0.6m respectively. at 29 February 2020 of £72.7m, charges other than those relating to supporting the bursary and • The impact of the company’s Grant-in-Aid drawn down from the which reduced the value of assets in the remaining scheme, with a scholarship schemes as detailed in operations on the community and DfE has previously been recorded note 3 to the accounts. the environment as revenue, and an accrual for corresponding reduction in liabilities Grant-in-Aid as at 31 March 2019 of the cash amount. A further • The desirability of the company was agreed with DfE. During the payment of £3.8m is due by the Remote Contingent Liabilities maintaining a reputation for high year ended 31 March 2020, DfE end of June 2020 and has been (this information is subject to standards of business conduct accrued, deducted from the value and SLC agreed to treat Grant-in- audit) • The need to act fairly as between Aid on a cash basis, in line with of the Retirement Benefit Obligation SLC is not aware of any remote members of the company. DfE’s own reporting requirements Surplus and reflected within the contingent liabilities that would be and in line with the Government gain on settlement in note 16. This report was approved by SLC’s required to be disclosed under the Financial Reporting Manual(FReM). Main Board on 30 June 2020 and requirements of the FReM. Grant-in-Aid will be credited to Ex-gratia Payments (this signed on the Board’s behalf by: SLC’s reserves, and no longer information is subject to incorporated within the Statement audit) of Comprehensive Net Expenditure (SOCNE). SLC is content that this Each year, SLC has a specific Paula Sussex is also acceptable under the delegated authority of up to Chief Executive Companies Act. £100,000 for ex-gratia payments to customers. This includes payments and Accounting Officer requested by DfE-appointed 22 September 2020 Independent Assessors for up to £5,000. Payments of £5,000 and more are detailed out-with
32 33 04 Remuneration and Staff Report
Contents
4.1. Oversight and Responsibilities 36 4.2. Remuneration Policy 37
4.3. Non-Executive Directors and Executive Leadership Team Salary and Pension Information (audited) 39 4.4. Staff Numbers and Remuneration (audited) 44 4.5. People Strategy (unaudited) 47
34 35 Remuneration and Staff Report 04
4.1 Remuneration, People All policies are set within the SLC aims that the remuneration grounds of redundancy, or in 4.2 and Organisational Design context of applicable Government packages offered to the ELT: the interests of the efficiency of Oversight and the organisation, service-based Remuneration Policy guidelines and, where appropriate, • enable SLC to attract, retain and Committee compensation is applied. Responsibilities the advice of the relevant parties motivate high calibre executives The Board delegates certain at the DfE. In consultation with the responsibilities to the Chair of the Board, the Committee • remunerate individuals fairly Salaries The Remuneration and Staff Report for individual responsibility and Remuneration, People and agrees the performance framework Remuneration of the Non-Executive sets out the remuneration of all SLC contribution, while providing an Organisational Design (RPOD) and the proposed annual Directors (including the Chair) is Directors and of those members element of performance related pay Committee. The Committee performance related payment set for their three-year term of of the ELT who are not Directors, reflecting the overall performance of determines and agrees with for the CEO. The Committee appointment by the Secretary of together with details of the SLC, having regard to public sector the Board the framework for determines the total individual State for Education, the Welsh Remuneration policy for the year pay guidance/restrictions the selection, appointment and remuneration package for other Ministers, the Scottish Ministers ended 31 March 2020. remuneration of the ELT including members of the ELT in consultation • take account of salary policy and the Minister for the Economy in This report is prepared in the Chief Executive Officer (CEO). with the Chair and the CEO. within the rest of SLC and the Northern Ireland or their delegated accordance with the Companies The Committee and Board work relationship that should exist representative(s). Additional Act 2006, the Large and closely with the DfE, relevant between the remuneration of the responsibilities, such as leading Medium-sized Companies and Ministers and, as appropriate, other ELT and that of other employees on priority areas within SLC, may Groups (Accounts and Reports) government departments in the attract further remuneration. (Amendment) Regulations 2013 as appointment of such roles. Annual salary reviews take into appropriate and follows the overall account the pay remit requirements Pensions principles of the FReM. of HM Treasury at On 1 March 2020 SLC became Committee Membership From To https://www.gov.uk/government/ publications/civil-service-pay- a member of the Civil Service David Gravells 1 April 2019 31 March 2020 remit-guidance-2019-to-2020/ Pension Arrangements and made civil-service-pay-remit-guidance- the alpha and partnership schemes Mary Curnock Cook 1 April 2019 10 July 2019 2019-to-2020 alongside the HM available to all its employees. As Stephen Tetlow 7 May 2019 31 March 2020 Treasury guidance on public sector agreed with Cabinet Office, SLC pay and terms at transferred all the active members Mary Curnock Cook stepped down from the RPOD Committee during the https://assets.publishing.service. of the SLC Pension Scheme to year in order to take on responsibility in the Evolve Oversight Committee. gov.uk/government/uploads/ CSPA alpha and provided non- system/uploads/attachment_ scheme members with the options Annual Statement from the • Uplifting all grade 1 employees data/file/819562/190702_Public_ of joining alpha, joining partnership, RPOD Committee Chair across all our locations to a salary sector_pay_and_terms.pdf or remaining a non-pension equivalent to the Living Wage member until next re-enrolment All salaries, including the CEO’s, The RPOD Committee is committed Foundation’s Real Living Wage date when they would be auto- are reviewed annually. Salaries are to ensuring SLC has a well- rate enrolled into alpha. Details of the set considering external markets, managed, skilled, engaged and scheme can be found at: www. • Increasing our starting salary internal comparisons and individual properly rewarded workforce. civilservicepensionscheme.org.uk for lower paid employees within responsibilities. With the launch of the SLC People grades 2, 2B and 3 across all Until that time, SLC contributed All ELT members are permanent Strategy in 2019, a number of locations to ensure starting pay to the Student Loans Company employees and are therefore projects have been developed to within these grades remains Limited Retirement and Death on standard SLC contracts of enable the organisation to achieve competitive. Benefits Scheme (SLC Pension its goals as aforementioned. The employment and have notice Scheme) which was a defined As a result of these changes, projects are placed under four main periods of six months. In previous benefit scheme that all employees over 1,900 lower paid employees components which are Reward, years, members of ELT who were had the option to join, and benefitted from pay increases from Skills, Workforce and Brand. not permanent employees were on NOW : Pensions, a defined 1 April 2019. The remainder of standard contracts via the Crown contribution scheme, which met I am pleased as Chair of the this report explains how executive Commercial Service’s Contingent SLC’s statutory obligations to enrol committee to be able to report that remunerations is determined at SLC Labour One framework. If a all employees in a pension scheme. the following changes to our pay and gives more information on the member of the ELT’s employment structure were implemented to policies applied during the year. with SLC is terminated on the ensure a fairer, more equitable pay and reward system for staff:
36 37 Remuneration and Staff Report 04
4.2 ELT members who were permanent These targets and the CEO’s Remuneration of Board Members 4.3 staff had the option during the appraisal of their performance Remuneration Policy year of joining the Student Loans against them are subject to review Christian Brodie left the organisation at the end of his second term as Chair Non-Executive on 31 January 2020, with Andrew Wathey taking on the role of Interim Retirement and Death Benefits by the RPOD Committee. Subject Directors and Executive Scheme. As ordinary members, to RPOD Committee approval, Chair until the end of the financial year. Peter Lauener became permanent they contributed 6% of pensionable members of the ELT who are Chair of the Board on 1 April 2020. Leadership Team salary and SLC contributed 45.4% permanent staff are eligible to There were no redundancy payments to members of the Board for loss of Salary and Pension (2019: 27.1%) of employees’ participate in SLC’s performance office made during the year (2019: £nil). pensionable salary during the related payment scheme. Information (audited) year, in line with the 2016 actuarial The Chair reviews the performance valuation and recovery plan agreed of the CEO and, based on delivery 4.3.1 Fees Paid to Chair and Non-Executive Directors with the Trustees of the Scheme. against agreed objectives, may The SLC Pension Scheme was propose an award for consideration 31 March 2020 31 March 2019 a final salary scheme providing by the RPOD Committee. The terms benefits at the earliest retirement of her appointment provide for a Remuneration Other Expenses Total Remuneration Other Expenses Total age of 65. These benefits consisted performance related payment to (to nearest £100) (to nearest £100) of an annual pension based on a maximum value of £20,000 per a final pensionable salary and annum. £’000 £’000 £’000 £’000 £’000 £’000 pensionable service, and a tax-free Performance-related payments Christian Brodie lump sum payable on retirement, 40-45 2.1 40-45 45-50 3.6 50-55 are not awarded to Non-Executive (to 31 Jan 2020) which is equivalent to three times Directors, interim staff nor any Antonia Cox the annual pension. - - - 15-20 3.1 20-25 member of the ELT who is not a (to 31 March 2019) permanent employee. Performance Related Mary Curnock Cook 15-20 1.7 15-20 10-15 3.1 15-20 Payments Other Benefits and Expenses Each member of the ELT has SLC meets normal allowable travel Simon Devonshire 15-20 1.5 15-20 15-20 1.8 15-20 personal performance objectives, costs for Board Directors and Natalie Elphicke including specific targets which members of ELT in accordance with 5-10 1.0 5-10 15-20 2.0 15-20 (to 30 Sep 2019) have a significant impact on the SLC’s standard travel and expenses performance of the organisation. policy. David Gravells 15-20 2.0 15-20 15-20 4.1 20-25
Sally Jones-Evans - - - - 0.2 0-5 (to 31 March 2018) Charlotte Moar 10-15 3.3 15-20 - - - (from 7 May 2019) Stephen Tetlow 10-15 2.8 15-20 - - - (from 7 May 2019)
Andrew Wathey 15-20 0.7 15-20 10-15 1.7 15-20
38 39 Remuneration and Staff Report 04
4.3 Remuneration of ELT Commercial and Estates, added Enterprise Risk and Compliance to 31 March 2019 Non-Executive The ELT is responsible for the day- her role; Morven Spalding retained to-day management and leadership leadership of SLC’s HR function Remuneration Other Benefits Performance Pension Total Directors and and Expenses (to related pay** Contributions (to Remuneration of SLC’s activities and operations. in her interim role and became the Paula Sussex continued her role as Executive nearest £100) nearest £100) Executive permanent Executive Director of Leadership Team £’000 £’000 £’000 £’000 £’000 CEO during the year. People in November 2019. Leadership Team Paula Sussex 100-105 David Wallace continued as Deputy - 5-10 13 120-125 Salary and Pension Adrian Tucker left the organisation (from 17 Sep 2018) (190-195)* CEO and Chief Customer Officer as Interim Chief Information Officer throughout the year; Derek Ross Peter Lauener 60-65 Information (audited) (CIO) in June 2019. Nigel Carroll, 9.9 - 13 80-85 (to 16 Sep 2018) (150-155)* continued as Executive Director the Chief Technology Officer, took of Operations; Bernice McNaught over the role in an interim basis until David Wallace 140-145 - 5-10 37 180-185 continued as Executive Director of Stephen Campbell was appointed Repayments and Counter Fraud as permanent CIO in August 2019. and also as Senior Responsible Derek Ross 125-130 5.3 0-5 33 165-170 Officer responsible for SLC’s There were no redundancy Transformation Programme payments to members of the ELT Bernice McNaught 125-130 - 0-5 33 160-165 (Evolve). for loss of office made during the year (2019: £nil). Jacqui Smilie 90-95 Jacqui Smillie continued her role as - 0-5 1 95-100 (from 16 Jul 2018) (130-135)* Chief Financial Officer and as well Morven Spalding 35-40 as Executive Director of Finance, - - - 35-40 (from 26 Nov 2018) (110-115)* 315-320 4.3.2. Remuneration of ELT Adrian Tucker - - - 315-320 (315-320)* 31 March 2020 Mike Blackburn 95-100 - - - 95-100 (to 15 Jul 2018) (290-295)* Remuneration Other Benefits Accrued Pension Total and Expenses (to Performance Contributions (to Remuneration * Denotes the full-time equivalent salaries for those members of the ELT who were not in post for the full nearest £100) Related Pay nearest £100) financial year. Executive Leadership Team £’000 £’000 £’000 £’000 £’000 ** Accrued performance pay is shown in bankds of £5,000 as follows: £1-£4,999; £5,000 - £9,999; £10,000 - £14,999 and £15,000 - £19,999 Paula Sussex 190-195 - 15-20 19 220-225
David Wallace 140-145 - 5-10 14 160-165 Salary includes gross salary and any other allowance. Other benefit and expenses represent taxable subsistence and travel costs, which is a change in the disclosure from Derek Ross 125-130 8.6 - 13 145-150 the previous year’s published accounts which included non-taxable subsistence and travel costs. Bernice McNaught 130-135 - 5-10 13 150-155 The only taxable benefits for the ELT during the year to 31 March 2020 represented a car Jacqui Smillie 130-135 - 5-10 13 145-150 benefit of £8,600 (2019: £5,300) to Derek Ross. The changes in the disclosure for the prior Morven Spalding 110-115 - 0-5 12 125-130 year to 31 March 2019 which removes all non-taxable expenses are as follows: 85-90 Adrian Tucker (to 30 Jun 2019) - - - 85-90 (310-315)* Other Benefits and Expenses Other Benefits and (nearest £100) Expenses (nearest £100) Stephen Campbell (from 21 Aug 85-90 - 5-10 14 105-110 (prior year published accounts) (updated) 2019) (140-145)* Paula Sussex 0.1 - Nigel Carroll (from 1 Jul – 18 Aug 15-20 - - 6 20-25 2019) (120-125)* Peter Lauener 14.7 9.9 David Wallace 2.0 - Derek Ross 8.3 5.3 Bernice McNaught 1.5 - Jacqui Smillie 2.5 -
40 41 Remuneration and Staff Report 04
4.3 4.3 Non-Executive Directors and Executive Leadership Team Non-Executive Directors and Executive Leadership Team Salary and Pension Information (audited) Salary and Pension Information (audited)
4.3.3 Retirement Benefits for the ELT 4.3.4 Agency Payments for temporary members of the ELT
Accrued pension at Real increase in CETV as at 31 CETV as at 31 Increase in 31 March 2020 31 March 2019 pension age as at 31 accrued pension and March 2020 March 2019 CETV net of March 2020 and related related lump sum (to nearest (to nearest inflation (to Gross Payments Agency Fees Net Gross Payments Agency Fees Net lump sum during the year to 31 £1,000) £1,000) nearest £1,000) Remuneration Remuneration March 2020 £’000 £’000 £’000 £’000 £’000 £’000 £’000* £’000** £’000 £’000 £’000 Adrian Tucker 90 5 85 336 17 319 0-5 0-2.5 5 - 4 Paula Sussex*** Mike Blackburn - - - 104 4 100 0-5 (lump sum 5-10) 0-2.5 (lump sum 5-7.5) 101 10 91 TOTAL 90 5 85 440 21 419 David Wallace 20-25 0-2.5 311 307 2
Derek Ross 45-50 0-2.5 693 690 2 Median and Fair Pay Bernice 5-10 0-2.5 111 108 2 Reporting bodies are required to disclose the relationship between the McNaught remuneration including bonus paid during the year of the highest-paid Director in 0-5 0-2.5 3 - 2 their organisation and the median remuneration of the organisation’s workforce. Jacqui Smillie *** The CEO was the highest paid permanent member of the ELT, with a salary of 0-5 (lump sum 0-5) 0-2.5 (lump sum 2.5-5) 48 n/a 48 £197,000 (2019: £190,000 FTE), which includes the accrued bonus of £7,000 from 0-5 0-2.5 3 - 2 the previous year. This was 9.2 times (2019: 9.4 times) the median staff salary paid, Morven which was £21,426 (2019: £20,242) of the workforce. Spalding *** 0-5 (lump sum 0-5) 0-2.5 (lump sum 0-2.5) 15 n/a 15 However, in both the years ended 31 March 2020 and 31 March 2019, the highest paid member of the ELT was the Interim CIO. He was contracted through an 0-5 0-2.5 3 - 3 Stephen agency from December 2017 to 30 June 2019. The total annualised remuneration Campbell *** 0-5 (lump sum 0-5) 0-2.5 (lump sum 0-2.5) 29 n/a 29 of the Interim CIO was £312,480 (2019: £312,480) equivalent to 14.6 times (2019: 15.4 times) the median staff salary paid. (i) * these columns are stated in band of £5,000 During the year, remuneration for permanent members of staff ranged from £17,500 to £197,500 (2019: £17,063 to £190,000), and the remuneration for the entire ELT (ii) ** these columns are stated in bands of £2,500 was £1.0m (2019: £1.1m). (iii) *** applicable pension regulations prohibited the past service transfer of their benefits to the nuvos Civil Service Pension Arrangements; additional disclosure therefore relates to those retained benefits in the SLC Pension Scheme as at 31 March 2020 (iv) Cash Equivalent Transfer Values (CETV) have been calculated in accordance with the Occupational Pension Schemes (Transfer Values) Regulations 1996, depending upon length of membership of the SLC Pension Scheme, and figures have been rounded (v) Inflation over the year was 2.4% (vi) Any Additional Voluntary Contributions paid by members of the ELT and the resulting benefits are not shown (vii) “Increase net of inflation” does not include a deduction for member contributions
42 43 Remuneration and Staff Report 04
4.4 The below table represents the average full-time equivalent employees: Severance Payments 4.4 Staff Numbers 4.4.1 Staff Numbers by grade and gender SLC agreed and paid 8 (2019: 1) severance payments during the year. Staff Numbers All payments in both years were other severance payments, and none and Remuneration 31 March 2020 31 March 2019 represented compulsory redundancy payments. and Remuneration (audited) Male No Female No Total No Male No Female No Total No Note 1 to the Financial Statements details SLC’s policy on termination (audited) benefits under the heading ‘Employee Benefits’. No employees received a Executive Leadership Team 3 4 7 2 3 5 payment through insurance due to ill health (2019: 1). Senior Management Team 15 8 23 15 10 25 4.4.3 Severance Payments All other employees 1,523 1,755 3,278 1,457 1,618 3,075 31 March 2020 31 March 2019 Cost Band TOTAL 1,541 1,767 3,308 1,474 1,631 3,105 No No £< £10,000 - - ‘Permanent staff’ in the table Statement of Comprehensive Net £10,000 - £25,000 3 - below includes all staff with an Income/Expenditure. Consultancy employment contract with SLC costs during the year are detailed in £25,000 - £50,000 2 1 and includes those employees on note 4 to the accounts. Apart from £50,000 - £75,000 3 - fixed term contracts. ‘Agency costs’ legal and professional fees, other Total 8 1 incorporates agency staff who are consultancy costs included costs for fulfilling a permanent role within the data migration, IT and digital print structure; these support short term solutions and amounted to £7.7m 31 March 2000 31 March 2019 Cost Band requirements such as unexpected (2019: £10.3m) during the year. £’000 £’000 absences, short term peaks in There has been a 6.5% increase workload, short term projects or Total Cost (cash basis) 303 25 in staff numbers since last year – gaps between filling permanent from 3,105 to 3,308. This has had a vacancies. corresponding impact on the level Additionally, SLC has many service of salaries, with an additional cost contracts to support the delivery from the low pay business case also of the technology programmes. As increasing the wages and salaries these contracts are for an overall costs for the year. Full details are service, they are not incorporated provided in the financial review in within wages and salaries costs, the Strategic Report. Payment of but are incorporated within ‘other severance is excluded from the table administrative expenses’ within the below:
4.4.2. Wages and salaries
31 March 2020 31 March 2019 Permanent Agency Costs Total Permanent Agency Costs Total Staff Remuneration Staff Remuneration £’000 £’000 £’000 £’000 £’000 £’000
Wages and salaries 88,071 3,688 91,759 78,476 2,845 81,321
Social security costs 7,968 - 7,968 7,055 - 7,055
Pension costs 10,026 - 10,026 9,707 - 9,707
Gain on settlement (42,291) - (42,291) - - -
Direct staff costs 63,774 3,688 67,462 95,238 2,845 98,083
Indirect staff costs 1,019 - 1,019 766 - 766
Total staff costs 64,793 3,688 68,481 96,004 2,845 98,849
44 45 Remuneration and Staff Report 04
4.4 4.4.4 Off-payroll Arrangements SLC will be a great place to work • Brand 4.5 and to develop. Implementation of SLC aims to be an employer of Staff Numbers 31 March 31 March a comprehensive People Strategy choice. An improved employer People Strategy and Remuneration 2020 2019 aims to create a sustainable brand underpinned by a stronger (unaudited) No No organisation of the optimum size external reputation will help us to (audited) No of existing engagements as of 31 March 2020 27 15 with the correct capabilities, skills attract and retain good people. Of which, at the time of reporting have existed: and tools to improve wellbeing We will have robust morale and and engagement. SLC aims to organisational health, built on Less than one year 23 7 keep employees informed about its simple, fair and consistently Between 1 and 2 years 1 6 affairs and in particular about those adhered to policies and matters that affect them directly. processes. People will feel proud Between 2 and 3 years 3 - The company has a number of to work for SLC. Between 3 and 4 years - 2 regular digital communications 4 years or more - - including a daily all-staff newsletter Low Pay and regularly holds sessions where In March 2019 HM Treasury staff can put their questions directly approved SLC’s Low Pay Business 31 March 2020 to the ELT. SLC frequently issues No Case. As a result, the company has all-staff emails and maintains been able to raise all employees at an intranet site available to all No of new engagements, or those that reached six months in grade 1 to at least the Real Living 23 employees. duration, between 1 April and 31 March Wage (as defined by the Living Four key strands of the people Wage Foundation), with increases Of which, strategy are: reward, skills, too for employees at grades 2 and assessed as caught by IR35 12 workforce and brand. 3. With effect from 1 April 2019, over 1,900 lower paid employees assessed as not caught by IR35 11 • Reward have benefitted from this significant Fair pay, reward and progression engaged directly (via PSC contracted to department) and on payroll - milestone. SLC is committed are fundamental to attracting reassessed for consistency / assurance purposes during the year - to working with Government to valuable skills and retaining achieve further improvements. saw a change to IR35 status following consistency review - valued employees. • Skills Apprentices, Graduates and Adrian Tucker received off-payroll given to appropriately support the The company will develop Interns payments for the year ended 31 organisation going forward. Mike targeted and tailored programmes The apprenticeship scheme March 2020. Both Mike Blackburn Blackburn was appointed Interim to promote a positive learning continued during the year, bringing and Adrian Tucker received off- Chief Financial Officer on 26 July culture, enabling people to a new generation of talent into the payroll payments for the year 2017 when the previous position develop relevant skills and Chief Financial Officer, Operations ended 31 March 2019 as detailed of Interim Executive Director for experience at every stage of their and Technology Group Directorates. in the final table below. Adrian Corporate Services was abolished career with SLC. Tucker was appointed as Chief in order to support the organisation Many apprentices have succeeded
Information Officer on 4 December until a permanent position was • Workforce in gaining qualifications and Enhanced strategic workforce 2017 on an interim basis after the filled. The role was advertised on a entering substantive roles within planning will provide SLC with departure of Chris O’Connor. This permanent basis, and Jacqui Smilie SLC. The company’s Business Plan a longer-term view of labour interim appointment was made to took up the post of Chief Financial for 2020-21 outlines an increase supply and demand, better allow further consideration to be Officer on 16 July 2018. in apprentice, graduate and intern scenario-planning and a method opportunities across SLC. of producing strategic workforce 31 March 2020 31 March 2019 plans that are flexible and No No responsive to strategic goals and No of engagements of board members and/or senior officials with changing business objectives. We 1 2 significant financial responsibility during the financial year will recognise and encourage the strengths of a multi-generational Total no of individuals on payroll and off-payroll that have been workforce. deemed ‘board members and/or senior officials with significant 19 17 financial responsibility’ during the financial year
46 47 Remuneration and Staff Report 04
4.5 Investors in People provides an opportunity to learn Health and Wellbeing 4.5 from and share from our peers. People Strategy In June 2018 SLC obtained Silver This year SLC took further steps to making health and wellbeing a core People Strategy Standard accreditation from It was a special year for our LGBT+ part of the culture, with promotions on mental health awareness to all (unaudited) Investors in People (IIP), the UK’s Network, Arcus, with the 50-year employees. SLC offices now have a network of mental-health first-aiders. (unaudited) leading accreditation provider for anniversary since the Stonewall improving businesses through riots. The network provides a Sickness Absence Report good people management. IIP gave supportive visible environment particular praise to the way SLC for LGBT+ employees as well 31 March 2020 31 March 2019 % % supports new staff. as promoting a greater sense of understanding of LGBT+ issues and Sickness Absence 4.99 4.69 Equality, Diversity and participated in many Pride events. Inclusion One of these was participating in the Glasgow Pride event in August Trade Union SLC has an established 2019, walking under the ‘This Is Me SLC has a longstanding relationship with its recognised trade union, commitment to equality, diversity Scotland’ banner connecting SLC Public and Commercial Services Union (PCS). SLC and PCS hold monthly and inclusion (EDI). In April 2020 with other organisations supporting meetings which provide an opportunity to discuss and resolve employment SLC published the statutory gender wider inclusion. The network also and business-related matters. PCS provided support across all SLC sites; pay gap report, published at http:// helped in the development of the Glasgow, Darlington and Llandudno Junction. www.gov.uk/slc. This year SLC will new Transgender Equality Policy also publish its new EDI Strategy and Guidance. The Facility Time Agreement implemented in November 2018 permits SLC spanning the next three years, employees who act as PCS representatives to spend up to a maximum of Supporting the mental health of including three objectives: 50% of their working week on union responsibilities. Overall, 14.28% of all of our employees remains a time was spent on trade union activities. • To build and maintain a diverse priority on our agenda and bespoke and inclusive workforce Managing Mental Health training Trade Union facility time reporting • To cultivate and promote a was delivered to managers in 2019, partnering with The Charlie Waller workforce culture where everyone 31 March 2020 31 March 2019 is included and is encouraged Memorial Trust. SLC also re-signed to be their true selves and feels the ‘Time to Change’ pledge during Employees identified as union officials 11 15 Mental Health Awareness Week accepted for who they are Full time equivalent employees identified as union officials 10.9 14.5 and continues to celebrate other • To work together towards an calendar dates including Time to Proportion of working time spend on facility time by employee: empowered and engaged Talk Day and World Mental Health 0% of working time - - workforce. Day. 1-50% of working time 9 7 The EDI Strategy recaps on the At the time of writing we continue to 51-99% of working time 2 8 progress within diversity and protect and support our employee’s inclusion over the past year and mental health as we communicate 100% of working time - - outlines our ambitious action plan about COVID-19, support wellbeing to support our three objectives and encourage a work/life balance Amount of pay bill spent on facility time £28,230 £58,795 as well as containing the annual for all.” compliance monitoring report. We Total Pay bill £94m £98m will keep our EDI Strategy under continuous review to ensure its %age of pay bill spent on facility time 0.03% 0.06% ongoing relevance and to set further actions where new priorities Time spend on paid trade union activities as a % of total paid facility time 100% 100% emerge. We have been working towards Investors in Diversity - a national equality standard with the National Centre for Diversity. This will help Paula Sussex us gauge the consequences of our diversity and inclusion effort and Chief Executive and Accounting Officer 22 September 2020
48 49 05 Governance Statement
Contents
5.1. Introduction 52
5.2. The Governance Framework 52
5.3. Risk Management Arrangements 58
5.4. Review of effectiveness 59
5.5 Conclusion 61
50 51 Governance Statement 05
5.1 As SLC’s Accounting Officer, I SLC’s Legal Status SLC’s Board of Directors responsible Minister’s approval) the 5.2 have personal responsibility for (“The Board”) CEO and set their objectives. Introduction maintaining a sound system of SLC was incorporated in 1989 as The Governance Non‐Executive Directors of the governance, internal control and a company limited by shares under The Board operates within a Board are appointed by the Framework risk management that supports the the Companies Acts and is wholly policy and resources framework Secretary of State for Education, achievement of SLC’s policies, aims in public ownership – the UK’s four determined by the Secretary of from a variety of backgrounds and objectives while safeguarding Government administrations are its State. In summary, its role is: to based on their knowledge and public funds and assets. This is in shareholders. Since April 1996 SLC establish SLC’s strategic goals and experience gained in both the accordance with the responsibilities has been classified as an executive key business objectives and to public and private sectors in assigned to me by the DfE, as non-departmental public body monitor performance against these; industry, commerce and academia. described within the Framework (NDPB). to ensure that there is effective Document, and in accordance with Accountability to governance concerning the use of The Board is required to public money; to regularly review relevant HM Treasury guidance, in Government Shareholders demonstrate high standards of particular the FReM and Managing financial information and provide corporate governance at all times Public Money. The Secretary of State for assurance to Government that and to ensure that best practice is Education accounts for SLC’s appropriate action is taken over any followed. I am personally accountable to the business in the UK Parliament. The concerns; and to appoint (with the UK Parliament, via and alongside DfE Minister with responsibility the DfE Principal Accounting for Higher Education may also 5.2.1 Board Membership and Attendance Record Officer, and to the devolved act on his or her behalf as the parliaments and administrations, via “Responsible Minister”. SLC is Board Members From To Attendance their Accounting Officers. separately accountable to the Christian Brodie, Non-Executive Chair 1 February 2014 January 2020 8 / 8 This Governance Statement Responsible Minister and to provides information about devolved administrations’ Ministers Andrew Wathey, Non Executive Director, Interim Chair 2 January 2018 January 2021 9 /10 SLC’s corporate governance, risk for performance in their respective management and internal control jurisdictions. However, the devolved Mary Curnock Cook, Non-Executive Director December 2017 December 2020 10 / 10 arrangements. It also outlines Governments have agreed that issues that have arisen during DfE will act as the “Sponsor Simon Devonshire, Non-Executive Director 1 March 2016 March 2022 10 / 10 this and previous years and the Department”, having the primary mitigations that have been put in relationship with SLC, particularly in David Gravells, Non-Executive Director 1 March 2016 September 2020 10 / 10 place. relation to corporate governance. Natalie Elphicke, Non-Executive Director 1 March 2016 September 2019 5 / 5 5.2 The Governance Framework The Responsible Minister appoints the SLC Chair and Non-Executive Charlotte Moar May 2019 May 2022 9 / 9 The Governance SLC has arrangements in place to Directors and determines Framework ensure good corporate governance, their terms and conditions. Stephen Tetlow May 2019 May 2022 8 / 9 and the Framework Document, Appointments are made for a period Paula Sussex, CEO September 2018 ongoing 10 / 10 which can be found at www.gov.uk/ of three years and comply with the slc, provides comprehensive detail Code of Practice for Ministerial David Wallace, Deputy CEO and Chief Customer Officer January 2019 ongoing 10 / 10 of the roles and responsibilities Appointments to Public Bodies. The of Executives, Board members Responsible Minister also approves Jacqui Smillie, CFO January 2019 ongoing 10 / 10 and Shareholders, as well as of the Board’s appointment of the two key Board Committees – the Chief Executive. Gary Womersley, Company Secretary December 2015 ongoing 10 / 10 Audit and Risk Committee (ARC) The Permanent Secretary of DfE, 1 2 and the Remuneration, People Second term appointment Interim Chair from 1 February 2020 to 31 March 2020 as the Principal Accounting Officer and Organisational Design (RPOD) of DfE, and acting on behalf of the Committee. The Board held 10 meetings during 2019-20; the table above shows how many Accounting Officers of the Devolved of these each member attended (during the period of their membership). Administrations, has designated SLC’s Chief Executive Officer (CEO) as SLC’s Accounting Officer.
52 53 Governance Statement 05
5.2 Matters considered by the Board Effectiveness Review The Audit and Risk Committee (ARC) 5.2 The Governance Board and Inductions ARC is a committee of the Board; in addition, it advises SLC’s Accounting The Governance At each meeting, the Board In accordance with the Framework Officer on internal control and governance, by reviewing the effectiveness, Framework reviewed SLC’s operational and Document, an internal board reliability and integrity of audit, risk management and assurance Framework financial performance alongside effectiveness survey took place and arrangements. its key corporate risks, via the reported its findings to the Board in monthly CEO and CFO reports, September 2019. Overall, scoring ARC Membership and Attendance Record and discussed progress against from the present exercise shows From To Attendance the company’s policy change comparable or improved scoring programme, on behalf of the under the categories of Board Natalie Elphicke, Non-Executive Director, ARC Chair 1 March 2016 September 2019 5 / 5 four Government shareholders. objectives, functioning of the Board, The quality of operational and communications and relationships, Charlotte Moar, Non Executive Director, ARC Chair 2 September 2019 May 2022 4 / 4 performance data provided to the strategic aims and role of the Chair. Board in the form of the company’s Two high priority themes were Andrew Wathey, Non Executive Director January 2018 January 2020 5 / 7 Corporate Performance Dashboard identified in the review: is subject to annual audit by GIAA, Mary Curnock Cook, Non-Executive Director December 2017 December 2020 8 / 8 • The need to continue to maintain who this year reported “substantial” the new focus of performance Douglas Griffin, Independent External Member September 2018 August 2021 7 / 8 assurance in its framework of and financial material, and to governance, risk-management and ensure that timing is aligned to 1 ARC Chair until and including September 2019 2 ARC Chair from September 2019 assurance. the process for producing the There was close monitoring of Annual Report and Accounts ARC held eight meetings during 2019-20; the table above shows operational services throughout the how many of these each member attended (during the period of their • The need for a secure transition year, including application numbers, membership) plan for the appointment of a new delivery capacity and customer Chair satisfaction, alongside regular Matters considered by ARC consideration of progress against The company has a comprehensive The committee regularly reviewed key risks and issues, internal audit SLC’s Evolve transformational induction process for new Board progress and performance reports and, updates on significant legal change portfolio, with particular members; inductions for two new matters throughout the year. focus on the upcoming new online members, Charlotte Moar and During 2019-20, ARC reviewed its regular meeting arrangements, with repayment service. Cyber security, Stephen Tetlow took place this year. more focus on ‘deep-dive’ exercises – (following a similar change to the disaster recovery capability, SLC’s Board schedule during 2018-19). A ‘deep dive’ in November benchmarked corporate affairs strategy and its SLC risk management and compliance arrangements against an stakeholder forum were also the internationally recognised standard - (the COSO* Framework). subjects of key discussions during the year. Additionally, it fulfilled its role in reviewing: Additionally, the Board considered • The Annual Report and Accounts for 2018-19, incorporating SLC’s executive appointments and the accounting policies, which was recommended by the ARC for approval terms of reference for its sub- by the Board committees, and it reviewed • The external audit strategy, and interim reports and fees for 2018-19 arrangements for the coming • The internal audit strategy and audit plan for 2020-21 financial year (2020-21), including the company’s Business ARC also reviewed the Departmental Security Health-check, the Internal Plan, budget and the Annual Audit Annual Report and Opinion, SLC’s 2018-19 Governance Statement, Performance and Resource and annual audits of the accuracy of student support payments in England Agreement. and Wales. *COSO is the Committee of Sponsoring Organisations of the Treadway Commission
54 55 Governance Statement 05
5.2 The Remuneration People and Organisational Design Shareholders and Assessors 5.2 The Governance Committee (RPOD) The four Government Shareholders each appoint an “Assessor” who has The Governance RPOD is also a committee of the Board. Its primary role relates to the the right to attend all main Board meetings and committee meetings on Framework appointment and remuneration of members of the ELT, including the their behalf, and thus has access to SLC’s regular internal control and Framework CEO. Its responsibilities also include periodically reviewing the company’s risk reports. Shareholders’ key responsibilities include determining policy organisational structure and design; any major organisational or executive and maintaining the legislative framework for student support, providing a leadership changes require RPOD’s approval. resource budget and Grant-in-Aid and setting SLC’s functions, strategic focus and business objectives. 5.2.3 RPOD Membership and Attendance Record Register of Interests From To Attendance All Non-Executive Directors are independent of management and are David Gravells, Non-Executive Director, Chair March 2016 September 2020 5 / 5 required to declare any outside interests. They are required to take due care to avoid conflict between their own and SLC interests. Related Party Mary Curnock Cook, Non-Executive Director 1 December 2017 July 2019 1 / 1 disclosures, as per IAS 24, are included within note 21 to the Financial Statements. A register of interests is available upon request. Stephen Tetlow May 2019 May 2022 5 / 5 The Executive Leadership Team (ELT) 1 Mary Curnock Cook stepped down from RPOD in July to take on responsibility for the Evolve Oversight Committee The ELT is responsible for the day-to-day management of the company. ELT controls and monitors SLC’s operational and financial management, RPODC held five meetings during 2019-20; the table above shows sets SLC’s business priorities and objectives in line with strategies set out how many of these each member attended (during the period of their by shareholders, and oversees SLC’s capacity and capability to deliver membership). within available resources. Each Executive Director is supported by a team of senior managers, who collectively make up the company’s Senior Matters considered by RPODC Management Team (SMT). Decisions on reserved matters are subject to Key matters considered this year included the new SLC People Strategy, approval of SLC’s Board. which covered the SLC annual pay remit, the revised pay and grading business case, new reward strategy and pension scheme transfer. The 5.2.4 ELT Membership and in-year changes committee also reviewed the results of the employee engagement survey, Equality Diversity and Inclusion 3-year strategy and Gender pay gap report. In-Year Changes
The RPOD Committee also fulfilled its role in considering: Paula Sussex, Chief Executive Officer NA • The performance and objectives of the CEO David Wallace, Deputy CEO and Chief Customer Officer NA • The ELT’s terms of appointment, contractual arrangements, performance and year-end reviews Jacqui Smillie, Chief Financial Officer NA
• All other business as determined by the Terms of Reference for Stephen Campbell, Chief Information Officer Since 21 August 2019 the Committee Adrian Tucker, Interim Chief Information Officer Until 30 June 2019 The Evolve Oversight Committee Derek Ross, Executive Director of Operations NA The Evolve Oversight Committee is a committee of the SLC Board, chaired by Non-Executive Director Simon Devonshire. It provides the SLC Board Bernice McNaught, Executive Director of Repayments and Counter Fraud NA with oversight of the company’s transformational Evolve Programme, Initially interim, became Morven Spalding, Executive Director of People bringing experience and market insight to maximise opportunities within permanent in November 2019 projects and to integrate progress with SLC’s People Strategy. The Committee specifically provides effective oversight of the programme’s technology component to ensure that the company achieves good value for money and realises planned benefits.
56 57 Governance Statement 05
5.3 Risk Management Key Risks in 2019-20 As Accounting Officer, I have the year, the requirement to observe 5.4 responsibility for reviewing the and adhere to a set of processes Risk Management SLC has a clear and comprehensive The key risks under consideration effectiveness of the system of with rigour needs to be consistently Review of risk management framework during the year concerned Disaster Arrangements internal control, and I take personal applied across the Team. Effectiveness in place. During 2019-20, the Recovery, Cyber Security and responsibility in this Governance SLC’s system of governance, company significantly strengthened Information and Data Handling. Statement for the financial year internal control and risk this with the expansion and These are detailed in the Strategic 2019-20. restructuring of the Enterprise Risk Report (see section 3.7 above). management is designed to and Compliance (ERC) Team. This My review of the effectiveness of manage risk to a reasonable Towards the end of the year included the recruitment of a new the system of governance, internal level rather than to eliminate all newly identified and emerging senior role to head up the team, control and risk management, risk of failure to achieve policies, risks included: and additional risk analysts; the which has been in place in SLC aims and objectives. It can team now operates in a business COVID-19: throughout the year ended 31 therefore only provide reasonable partner model. The impact of this pandemic March 2020, and up to the date of and not absolute assurance of approval of the Annual Report and effectiveness. It is based on an SLC now operates a Three Lines of on SLC was rated severe and subsequently crystallised as an Accounts, is informed by: ongoing process designed to Defence model and operated within identify and prioritise risks to the issue. The current focus is to • The work of the Internal Auditors, a ‘cautious’ risk appetite. Following achievement of company policies, ensure the safety of our staff and who review all material risks and the ARC’s ‘deep-dive’ into risk aims and objectives, to evaluate the that most critical processes can business areas management in November 2019, likelihood of those risks occurring, the ERC Team has further refined continue, namely making payments to individuals and institutions. SLC • My ELT, who have each provided their impact and the need to plans to strengthen the company’s additional assurance over the manage them effectively. risk management arrangements invoked its Business Continuity Plan and has mobilised around controls they have put in place • Defining and agreeing a four key areas: protecting our over the activities where they comprehensive risk and people, managing the supply chain, have delegated responsibility compliance framework that delivering critical processes and • SLC’s Senior Management Team, clearly articulates roles and governance / communication. SLC who certify compliance with key responsibilities has now successfully transitioned controls twice a year and produce • Creating a new policy that aligns to a predominantly home-working an annual assurance statement business very quickly and also at completely with the new IT • Comments made by the External minimum cost. system Auditors in their management • Identifying and training key ‘role Flat Cash Budget: letter and other reports holders’ throughout the business SLC has assessed the impact of the • The SLC Board, ARC and who will be pivotal in the ongoing agreed funding settlement, which is Company Secretary use and success of the new broadly “flat cash”. The APRA letter framework and system for 2020-21 sets out a small (£0.7m) These did not identify significant concerns with control. • Holding a series of workshops increase against 2019-20 across across SLC to identify, document Programme (£169.2m to £169.9m) As part of a review of its adherence and agree the highest inherent and Capital (£40.9m to £41.0m) with DfE controls, in February risks to SLC budgets, with Administration 2020 SLC identified that it required budget unchanged (at £41.5m). retrospective approval for spend • Then, in turn, identifying and The main challenge SLC has faced during financial year 2019-20 documenting key controls to has been to produce a balanced on 8 contractors paid more than manage these areas of highest budget to meet the priorities of the £150,000 (on an annualised basis). inherent risk organisation, including delivery of These cases were brought to Progress against these deliverables a sizeable Evolve transformation DfE’s attention in March 2020. is presented regularly at ELT, ARC programme, against the “flat Retrospective approval was and the Board. cash” funding position. SLC has subsequently obtained. completed a re-prioritisation of planned activities and made A number of commercial contracts some difficult decisions to ensure also required retrospective successful delivery and affordability approval. Despite improvements of key priorities. with commercial compliance during
58 59 Governance Statement 05
5.4 Internal Audit Opinion Previously Reported Issues Personal Data 5.5 Review of The Government Internal GIAA findings in the Annual Report The introduction of GDPR Conclusion Audit Agency (GIAA) provided and Accounts for 2018-19 included precipitated a step-change in Effectiveness a ‘moderate’ opinion on the commentary within the Governance requirements for all organisations framework of governance, risk Statement referring to: to ensure good governance, management and control within quality, and integrity are in place • Ageing core systems – in SLC for 2019-20. Their opinion over personal data. Significant particular, the ERP System reflects improvements made by funding and resource continue to the Company within the control • Issues with staff reward be invested in order to bring SLC environment since 2018-19 with In November 2019, SLC completed towards full compliance. operational accuracy, particularly the successful implementation Personal data losses are reported in delivering payments to of the first phase of its new ERP within the Directors’ Report. customers, significantly system (Workday) which now improved. It also noted progress handles the company’s core Conclusion in implementing elements of financial and HR functionality. I have considered the evidence the Repayments Strategy, and Phase 2 of the Workday project, available to me with regard to successful implementation which will deliver new, substantially the production of the annual of the majority of Projects enhanced analysis and reporting Governance Statement and reviewed, in line with approved capability alongside new HR conclude that SLC maintains a Company methodology. They functionality covering performance sound system of governance, risk also noted improvements in management and Civil Service management and internal control. the implementation of business Pension integration, is underway continuity arrangements, and and on track to complete during performance management. 2020-21. The majority of opinions on In March 2019 the company was individual reviews exhibit able to reach a significant early substantial or moderate assurance, milestone in its effort to find ways Paula Sussex with 17% being graded “limited”, to enhance reward following a which compares favourably with Chief Executive sustained period of public sector and Accounting Officer 2018-19, where comparable figures pay restraint. HM Treasury’s were 26%. approval of SLC’s Low Pay 22 September 2020 Business Case enabled SLC to bring all employees up to at least the Real Living Wage (as defined by The Living Wage Foundation); the company has since seen a significantly lower level of attrition within its two lowest staff grades. During 2019-20, SLC also launched its new People Strategy, which plans for significant enhancements to the company’s reward, recruitment and retention, including a new Careers Pathways initiative.
60 61 06 Parliamentary Accountability and Audit Report
Contents
6.1. Directors’ Report 64 6.2. Statement of Directors’ Responsibilities 68 6.3. Independent Auditor’s Report to the Members of Student Loans Company Limited 70
62 63 Parliamentary Accountability and Audit Report 06
6.1 The Directors’ Report including (IFRSs) as adopted by the EU Employees was not proceeding, SLC has 6.1 Financial Statements for Student (Adopted IFRSs) and International assessed constructive losses in Directors’ Report Loans Company Limited (SLC) is Financial Reporting Interpretations SLC aims to keep employees the programme preparation of Directors’ Report for the year ended 31 March 2020. Committee Interpretations. informed about its affairs and in £970,000. The Financial Statements have particular about those matters that Due to the UK Government advice been prepared in accordance with Principal Activities affect them directly. The company on COVID-19 the SLC Contact the Companies Act 2006 and, as has a number of regular digital The principal activities of SLC centres were closed temporarily appropriate, the FReM, and other communications including a daily are provided within the Strategic on 24 March 2020 and remained guidance issued by HM Treasury all-staff newsletter and regularly Report. closed to the end of the financial and the Secretary of State for holds sessions where staff can year. This resulted in contractual Education where the disclosure put their questions directly to the Dividends payments to SLC’s two outsource requirements of these go beyond ELT. SLC frequently issues all-staff providers (one for £145,000 and the Companies Act. The Financial SLC has no accumulated reserves emails and maintains an intranet one for £80,000) in respect of Statements have been prepared and accordingly the Directors do site available to all employees. resource ordered but not utilised and approved by Directors in not recommend the payment of a SLC has a longstanding relationship during this temporary closure of the accordance with the International dividend (2019: £nil). with its recognised trade union, the contact centre. Financial Reporting Standards Public and Commercial Services Union (PCS). SLC and PCS hold Other than the above, losses Directors and their Interests regular meetings which provide comprising payroll debt and the opportunity to discuss and customer invoice write-off was Board Members From To resolve employment and business- limited to less than £20,000 during Christian Brodie, Non Executive Chair* February 2014 January 2020 related matters. SLC is an Equal the year, with no individual write- Opportunities Employer and was offs exceeding £5,000. Andrew Wathey, Non Executive Director and Interim Chair* January 2018 January 2021 awarded the Disability Confident Mary Curnock Cook, Non Executive Director December 2017 December 2020 Level 2 award (demonstrating Information, Equipment and commitment to disabled individuals) Personal Data Losses Simon Devonshire, Non Executive Director March 2016 March 2022 and the conditional Investors in In the year ended 31 March 2020 Natalie Elphicke, Non Executive Director March 2016 September 2019 Diversity award. More information SLC reported eleven incidents to on employees is contained in the David Gravells, Non Executive Director March 2016 September 2020 the Information Commissioner’s Remuneration and Staff Report. Office (ICO) (31 March 2019: one). Charlotte Moar, Non-Executive Director May 2019 May 2022 Losses, Special Payments ICO made recommendations but Stephen Tetlow, Non-Executive Director May 2019 May 2022 did not take any further action in and Write-offs relation to any of the breaches. No There were eight redundancy further action was required. ELT Members From To payments in total during the SLC recorded the loss of 32 items Paula Sussex, CEO September 2018 Ongoing year which are detailed in the of computers and mobile phones Remuneration and Staff Report, (31 March 2019: 25). All devices David Wallace, Deputy CEO and Chief Customer Officer January 2019 Ongoing two of which were special were encrypted and carried Jacqui Smillie, CFO January 2019 Ongoing redundancy payments and subject no company data or personal to the appropriate approval from information. DfE. There were two settlement Company Secretary From To agreements made for court actions during the year amounting Gary Womersley December 2015 Ongoing to £30,000, and a settlement of
*As stated in the Remuneration Report, Christian Brodie left the organisation at the end of his second term as Chair on £1million made to conclude a 31 January 2020, with Andrew Wathey taking on the role of Interim Chair until the end of the financial year. Peter Lauener supplier dispute. became permanent Chair of the Board on 1 April 2020. There were no donations made All non-executive Directors are considered to be independent. Details of any related parties are disclosed in Note 21 of the Financial Statements. during either the year ended 31 No Director had any interest in the shares of SLC throughout either the year ended 31 March 2020 or 31 March 2019. March 2020 or 31 March 2019. SLC is wholly owned by the Secretary of State for Education, the Welsh Ministers, the Scottish Ministers and the Minister Following HMG’s budget for the Economy in Northern Ireland. All are entered as ‘Registrable Relevant Legal Entities’ in SLC’s Register of Persons announcement on 11 March 2020 with Significant Control. that the loan sale programme The Chief Executive Officer (CEO) is also the Accounting Officer (AO) for SLC.
64 65 Parliamentary Accountability and Audit Report 06
6.1 Corporate Governance SLC Board Remuneration, People The Board has appointed a 6.1 and Organisational Design Chartered Accountant as an Directors’ Report As an Executive NDPB, SLC’s The SLC Board is responsible for independent external member of Directors’ Report control framework is set out in the ensuring that effective corporate (RPOD) Committee ARC. Throughout the year, both SLC Framework Document, drawn governance arrangements are Members of the committee are external and internal audit had the up by the DfE in consultation with in place that set out how SLC is appointed by the Board for an right of independent access to the SLC and the relevant departments directed and controlled and the initial three-year term of office Chair and members of ARC, and of the Devolved Administrations. assurance on risk management and after which they may be appointed regular discussions have taken The Framework Document refers internal control is provided. for one further term of office. place. to the appropriate HMG guidance The Board is required to Assessors have the right to attend on corporate governance, including Further details regarding ARC and demonstrate high standards of all committee meetings on behalf HM Treasury’s Managing Public its responsibilities can be found in corporate governance at all times of the shareholders. The Board Money. As defined within Managing the Governance Statement. and to ensure that best practice determines the membership and Public Money and in the Accounting is followed. The responsibilities terms of reference. Officer Delegation Letter, the AO External Auditor of the Board are set out in the is charged with ensuring that The Chair of the committee will Governance Statement at All non-audit work undertaken by SLC operates with propriety and report back to the Board after Section 5. the external auditor is approved regularity; with maintaining a each meeting as required and the by ARC. There was no non-audit sound system of internal control Remuneration minutes of committee meetings work undertaken by the National that supports the achievement of are provided to Board members for Audit Office during the year. Details SLC’s policies, aims and objectives; The remuneration for the Chair information. of all fees earned by the external and Non-Executive Directors is and with regularly reviewing the Committee meetings will normally auditor are provided in note 4 of the determined by the Secretary of effectiveness of that system. The be attended by the CEO and the Financial Statements. State for Education, the Welsh AO is also responsible for preparing Executive Director responsible for Ministers, the Scottish Ministers The Comptroller and Auditor and signing the Governance People. For further information, and the Minister for the Economy General, the head of the National Statement (section 5). Due to its refer to the Remuneration and Staff in Northern Ireland. Audit Office, has been reappointed structure and objectives, SLC has Report. limited exposure to financial risk. An for the financial year ended 31 The remuneration of the CEO is March 2020. assessment of the credit, liquidity determined by the Board, subject Audit and Risk Committee and cash-flow risk is provided at to approval by the Secretary of (ARC) Remote Contingent Liabilities note 11. State for Education, the Welsh Members of the committee are As stated in section 3.8 above, SLC is bound by ‘Internal Control: Ministers, the Scottish Ministers appointed by the Board for an initial SLC is not aware of any remote Guidance for Directors on the and the Minister for the Economy three-year term of office. Members contingent liabilities that would be Combined Code’ (the Turnbull in Northern Ireland. are independent of management required to be disclosed under the guidance). It is also bound by The Non-Executive Directors are and free of any business or other requirements of the FReM. the guidance contained within appointed by the Secretary of relationships (including cross Managing Public Money issued by State for Education, on behalf of Directorships or day-to-day HM Treasury. the Welsh Ministers, the Scottish involvement in the management Ministers and the Minister for the of the business) which could Economy in Northern Ireland, for interfere with the exercise of their a fixed term appointment of three independent judgement. By Order of the Board years, which can be renewed Paula Sussex once, and extended in exceptional circumstances. Chief Executive and Accounting Officer 22 September 2020
66 67 Parliamentary Accountability and Audit Report 06
6.2 Statement of Directors’ • Make judgements and estimates Directors are responsible for financial information included on 6.2 Responsibilities on a reasonable basis; state keeping adequate accounting the company’s website. Legislation Statement whether applicable accounting records sufficient to show and in the UK governing the preparation Statement of Directors’ The Directors who held office at the standards as set out in the explain the company’s transactions and dissemination of Financial of Directors’ date of approval of the Directors’ Companies Act 2006 and and disclose, with reasonable Statements may differ from Responsibilities Report confirm that, so far as they FReM have been followed, and accuracy, at any time the financial legislation in other jurisdictions. Responsibilities are each aware, there is no relevant disclose and explain any material position of the company, and that The responsibilities of an audit information of which SLC’s departures in the Financial will enable them to ensure that the Accounting Officer, including external auditor is unaware. Each Statements Financial Statements comply with responsibility for the propriety and Director has taken all appropriate the Companies Act 2006. They • Prepare the Financial Statements regularity of the public finances steps to make themselves aware have general responsibility for on a going concern basis; and for which the Accounting Officer of any information relevant to taking such steps as are reasonably is answerable, for keeping proper the audit, and to establish that • Confirm that the Annual Report open to them to safeguard the records and for safeguarding SLC’s SLC’s external auditor is suitably and Accounts as a whole is fair, assets of the company and to assets, are set out in Managing informed. balanced and understandable and prevent and detect fraud and other Public Money published by HM take personal responsibility for irregularities. Directors are responsible for Treasury. the Annual Report and Accounts preparing the Directors’ Report The Directors have decided to and the judgements required in accordance with applicable prepare a Directors’ Remuneration for determining that it is fair, law and regulations. Company and Staff Report in order to comply balanced and understandable law requires them to prepare with the requirements of the FReM Financial Statements for each Under company law Directors must and in accordance with Schedule financial year. Under the Framework not approve Financial Statements 8 to The Large and Medium-sized Paula Sussex Agreement they are required to unless they are satisfied that they Companies and Groups (Accounts Chief Executive follow the principles of the FReM. give a true and fair view of the state and Reports) Regulations 2008 and Accounting Officer Consequently, they have elected of affairs of the company and of made under the Companies Act under the Companies Act to the net income/expenditure of the 2006, to the extent that they 22 September 2020 prepare the Financial Statements in company for the year. In preparing are relevant. The Directors are accordance with IFRS as adopted Financial Statements, Directors are responsible for the maintenance by the EU and applicable law and to required to: and integrity of the corporate and provide the additional disclosures • Select suitable accounting required by the FReM where these policies and then apply them go beyond the requirements of the consistently Companies Act 2006. • Make judgements and estimates In preparing the accounts, the that are reasonable and prudent Accounting Officer is required to comply with the FReM and in • State whether they have been particular to: prepared in accordance with IFRS as adopted by the EU • Observe the Accounts Direction issued by DfE, including • Prepare the Financial Statements the relevant accounting and on the going concern basis unless disclosure requirements, and it is inappropriate to presume apply suitable accounting policies that the company will continue in on a consistent basis business
68 69 Parliamentary Accountability and Audit Report 06
6.3 Opinion on Financial Opinion on regularity Conclusions relating to going Auditor’s responsibilities for 6.3 Independent Auditor’s Statements In my opinion, in all material concern the audit of the Financial Independent Auditor’s I have audited the financial respects the income and I have nothing to report in respect Statements Report to the expenditure recorded in the Report to the statements of the Student of the following matters in relation My responsibility is to audit and financial statements have been Members of Student Loans Company Limited for to which the ISAs (UK) require me express an opinion on the financial Members of Student applied to the purposes intended the year ended 31 March 2020 to report to you where: statements in accordance with Loans Company which comprise Statement of by Parliament and the financial Loans Company • the Student Loans Company’s applicable law and International Comprehensive Net Expenditure, transactions recorded in the use of the going concern basis Standards on Auditing (ISAs) (UK). Statement of Financial Position, financial statements conform to the of accounting in the preparation Statement of Changes in Equity authorities which govern them. An audit involves obtaining of the financial statements is not and Statement of Cashflow and evidence about the amounts appropriate; or the related notes, including the Basis of opinions and disclosures in the financial significant accounting policies. I conducted my audit in accordance • the Student Loans Company statements sufficient to give The financial reporting framework with International Standards on have not disclosed in the financial reasonable assurance that the that has been applied in their Auditing (ISAs) (UK) and Practice statements any identified financial statements are free preparation is applicable law Note 10 ‘Audit of Financial material uncertainties that may from material misstatement, and the International Financial Statements of Public Sector cast significant doubt about the whether caused by fraud or error. Reporting Standards as adopted Entities in the United Kingdom. Student Loans Company’s ability Reasonable assurance is a high by the European Union, as applied My responsibilities under those to continue to adopt the going level of assurance but is not a in accordance with the provisions standards are further described concern basis of accounting for a guarantee that an audit conducted of the Companies Act 2006. I have in the Auditor’s responsibilities period of at least twelve months in accordance with ISAs (UK) also audited the information in the for the audit of the financial from the date when the financial will always detect a material Directors’ Remuneration Report statements section of my report. statements are authorised for issue. misstatement when it exists. that is described as having been Those standards require me Misstatements can arise from fraud audited. and my staff to comply with the Responsibilities of the or error and are considered material Financial Reporting Council’s Directors for the Financial if, individually or in the aggregate, In my opinion the financial Revised Ethical Standard 2016. they could reasonably be expected statements: Statements I am independent of the Student to influence the economic decisions • give a true and fair view of the Loans Company Limited in As explained more fully in of users taken on the basis of these state of the company’s affairs as accordance with the ethical the Directors Responsibilities financial statements. Statement, the directors are at 31 March 2020 and of the loss requirements that are relevant As part of an audit in accordance responsible for: for the year then ended; and to my audit and the financial with ISAs (UK), I exercise statements in the UK. My staff and • have been properly prepared in • the preparation of the financial professional judgment and maintain I have fulfilled our other ethical accordance with International statements and for being satisfied professional scepticism throughout responsibilities in accordance with Financial Reporting Standards as that they give a true and fair view. the audit. I also: these requirements. I believe that adopted by European Union; and the audit evidence I have obtained • such internal control as • identify and assess the risks • have been prepared in is sufficient and appropriate to management determines is of material misstatement of the accordance with the Companies provide a basis for my opinion. necessary to enable the preparation financial statements, whether Act 2006. of financial statements that are due to fraud or error, design free from material misstatement, and perform audit procedures whether due to fraud or error. responsive to those risks, and obtain audit evidence that is • assessing the company’s ability sufficient and appropriate to to continue as a going concern, provide a basis for my opinion. disclosing, if applicable, matters The risk of not detecting a material relating to going concern and misstatement resulting from fraud using the going concern basis of is higher than for one resulting accounting unless the directors from error, as fraud may involve either intend to liquidate the collusion, forgery, intentional company or to cease operations, or omissions, misrepresentations, or have no realistic alternative but to the override of internal control. do so.
70 71 Parliamentary Accountability and Audit Report 06
6.3 • obtain an understanding of internal • I communicate with those Opinion on other matters Matters on which I report 6.3 control relevant to the audit in order charged with governance regarding, prescribed by the Companies by exception Independent Auditor’s to design audit procedures that are among other matters, the planned Independent Auditor’s Act 2006 Report to the appropriate in the circumstances, scope and timing of the audit and I have nothing to report in respect Report to the but not for the purpose of significant audit findings, including In my opinion: of the following matters where the Members of Student expressing an opinion on the any significant deficiencies in Companies Act 2006 requires me to Members of Student • the parts of the Remuneration effectiveness of the Student Loans internal control that I identify during report to you if, in my opinion: Loans Company Report to be audited have been Loans Company Company’s internal control. my audit. properly prepared; • adequate accounting records • evaluate the appropriateness In addition, I am required to have not been kept, or returns • in light of the knowledge and of accounting policies used and obtain evidence sufficient to give adequate for my audit have not understanding of the company the reasonableness of accounting reasonable assurance that the been received from branches not and its environment obtained estimates and related disclosures income and expenditure reported visited by my staff; or in the course of the audit, I made by management. in the financial statements have have not identified any material • the financial statements and the been applied to the purposes evaluate the overall presentation, misstatements in the Strategic part of the directors’ remuneration intended by Parliament and the structure and content of the Report or the Directors’ Report; and report to be audited are not in financial transactions conform to the financial statements, including agreement with the accounting authorities which govern them. • the information given in the the disclosures, and whether the records and returns; or Strategic and Directors’ Report financial statements represent the Other Information for the financial year for which the • certain disclosures of directors’ underlying transactions and events financial statements are prepared remuneration specified by law are in a manner that achieves fair Directors are responsible for is consistent with the financial not made; or presentation. the other information. The other information comprises information statements and those reports have • I have not received all of the • obtain sufficient appropriate included in the annual report but been prepared in accordance with information and explanations I audit evidence regarding the does not include the parts of the applicable legal requirements. require for my audit; or financial information of the business Remuneration Report described in • a corporate governance activities to express an opinion that report as having been audited, statement has not been prepared on the financial statements. I the financial statements and my by the company. am responsible for the direction, auditor’s report thereon. My opinion supervision and performance of the on the financial statements does not audit. I remain solely responsible for cover the other information and I do my audit opinion. not express any form of assurance • Conclude on the appropriateness conclusion thereon. In connection of the Student Loans Company’s with my audit of the financial Peter Morland use of the going concern basis statements, my responsibility is to (Senior Statutory Auditor) of accounting and, based on the read the other information and, in For and on behalf of the audit evidence obtained, whether a doing so, consider whether the other Comptroller and Auditor General material uncertainty exists related to information is materially inconsistent (Statutory Auditor) events or conditions that may cast with the financial statements or my significant doubt on the Student knowledge obtained in the audit or National Audit Office Loans Company’s ability to continue otherwise appears to be materially 157-197 Buckingham Palace Road as a going concern. If I conclude misstated. If, based on the work Victoria that a material uncertainty exists, I have performed, I conclude that London I am required to draw attention in there is a material misstatement of SW1W 9SP my report to the related disclosures this other information, I am required 23 September 2020 in the financial statements or, if to report that fact. I have nothing to such disclosures are inadequate, to report in this regard. modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my report. However, future events or conditions may cause the Student Loans Company to cease to continue as a going concern.
72 73 07 Financial Statements
Contents
7.1. Statement of Comprehensive Net Expenditure 76 7.2. Statement of Financial Position as at 31 March 2020 77 7.3. Statement of Changes in Taxpayers’ Equity 78 7.4. Statement of Cashflow 79 7.5. Notes to the Financial Statements 80
74 75 Financial Statements 07
7.1 Statement of Comprehensive Net Expenditure 7.2 Statement of Financial Position For the year ended 31 March 2020 as at 31 March 2020
Note 2020 2019 Note 2020 2019 1 April 2018 Restated Restated Restated £’000 £’000 £’000 £’000 £’000 £’000 £000 £000 Non-current assets Revenue 3 1,330 1,020 Property, plant and equipment 9 28,915 16,098 16,142 Intangible assets 10 99,436 94,731 91,504 Expenditure: Retirement benefit obligation surplus 16 10,557 - - Staff costs 5 (68,481) (98,849) Total non-current assets 138,908 110,829 107,646
Restructuring costs 5 (209) (84) Current assets Depreciation, amortisation and impairments 9,10 (41,112) (34,248) Other administrative expenses (83,892) (90,578) Trade and other receivables 12 7,835 6,796 8,636 Cash and cash equivalents 13 6,003 17,305 12,450 (193,694) (223,759) Corporation tax 3 2 1 Total current assets 13,841 24,103 21,087 Operating profit (192,364) (222,739) Total assets 152,749 134,932 128,733
Finance income 6 17 14 Current liabilities Finance costs 7 (1,724) (1,100) Trade and other payables 14 (29,745) (30,833) (25,063) Net financing expense (1,707) (1,086) Provisions 15 (135) (1,024) (201) Total current liabilities (29,880) (31,857) (25,264)
(Loss)/profit on ordinary activities before taxation (194,071) (223,825) Total assets less current liabilities 122,869 103,075 103,469 Tax on result of ordinary activities 8 (3) 1
(Loss)/profit on ordinary activities after taxation (194,074) (223,824) Non-current liabilities Trade and other payables 14 (9,399) - - Other comprehensive (expenditure)/income: Provisions 15 (2,322) (5,035) (5,281) Retirement benefit obligation 16 - (31,138) (23,227) Actuarial (loss)/gain on defined benefit pension scheme 16 (9,158) (8,943) Total non-current liabilities (11,721) (36,173) (28,508) Net liabilities 111,148 66,902 74,961 Total comprehensive net (expenditure)/income for (203,232) (232,767) the period Capital and reserves The notes in section 7.5 form an integral part of these Financial Statements. All income and expenditure reported is derived from continuing operations. Called up share capital 18 - - - General reserve 111,148 66,902 74,961
Total equity 111,148 66,902 74,961
The notes in section 7.5 form an integral part of these Financial Statements. These Financial Statements were approved by the Board of Directors on 30 June 2020 and were signed on its behalf by the Accounting Officer, who authorised these accounts for issue on the date of the Statutory Auditor’s certificate.
Paula Sussex, Chief Executive and Accounting Officer Date: 22 September 2020 Registered company number: 2401034
76 77 Financial Statements 07
7.3 Statement of Changes in Taxpayers’ Equity 7.4 Statement of Cashflow For the year ended 31 March 2020 for the year ended 31 March 2020
General Reserves 2020 Note 2020 2019 Restated
Note General Pension Total £’000 £’000 £’000 £’000 Fund Reserve Cashflow from operating activities
£’000 £’000 £’000 Loss on ordinary activities after taxation (194,074) (223,824)
Balance at 1 April 98,040 (31,138) 66,902 Adjustments to (loss)/profit on ordinary activities:
Net (loss)/profit on ordinary activities after taxation (244,927) 50,853 (194,074) Depreciation 9 9,466 5,096 Impairments - Property, plant and equipment 9 337 100 Actuarial (loss)/gain in retirement benefit obligations 16 - (9,158) (9,158) Amortisation 10 30,921 27,826 Grant from sponsoring department 241,718 - 241,718 Impairments - Intangible assets 10 388 1,226 Cumulative effect of adopting IFRS 16 5,760 - 5,760 Loss on disposal of fixed assets 4 169 205
Taxation 8 3 (1)
Balance at 31 March 100,591 10,557 111,148 Finance costs 7 1,724 1,100 Finance income 6 (17) (14)
(151,083) (188,286) General Reserves 2019 (Increase)/decrease in trade and other receivables (2,671) (718) Note General Pension Total As at 1 Fund Reserve April 2018 Increase/(Decrease) in trade and other payables (4,750) 7,227 restated Increase/(Decrease) in provisions (900) 577
£’000 £’000 £’000 £’000 Corporation tax paid 8 - 1
Balance at 1 April 98,188 (23,227) 74,961 33,055 Stamp Duty Land Tax Paid 8 6 -
Net (loss)/profit on ordinary activities after taxation (224,856) 1,032 (223,824) (172,764) Net cash inflow/(outflow) from operating activities (159,398) (181,199) Actuarial (loss)/gain in retirement benefit obligations 16 - (8,943) (8,943) 18,066 Grant-in-aid from sponsoring department 224,708 - 224,708 196,604 Cashflow from investing activities: Finance income 6 17 14
Balance at 31 March 98,040 (31,138) 66,902 74,961 Acquisition of property, plant and equipment 9 (5,250) (5,393) Acquisition of intangible assets 10 (36,015) (32,279) The notes in Section 7.5 form an integral part of these financial statements. Proceeds from sales of property, plant and equipment 15 36
The General Fund represents total assets less liabilities, to the extent that the total is not represented by other reserves Net cash outflow from investing activities (41,233) (37,622) and financing items for the Company. The Pension Reserve represents the net obligation to the defined benefit pension scheme. Cashflow from financing activities:
Grant in Aid funding received from sponsoring department 190,865 223,676
Cash payments for the principal portion of the lease liability (1,536) -
Net cash inflow from financing activities 189,329 223,676
Net increase/(decrease) in cash and cash equivalents 13 (11,302) 4,855
Cash and cash equivalents at 1 April 13 17,305 12,450
Cash and cash equivalents at 31 March 13 6,003 17,305
The notes in section 7.5 form an integral part of these Financial Statements.
78 79 Financial Statements 07
7.5 1.1 Accounting Policies any insurance contracts. As a For contracts in place at the date For those leases previously 7.5 result, it is not expected that the of initial application, the Company classified as finance leases, the Notes to the SLC is a company incorporated in implementation of IFRS 17 will has elected to apply the definition right-of-use asset and lease liability Notes to the England and Wales and domiciled Financial Statements affect the Annual Report and of a lease from IAS 17 and IFRIC are measured at the date of initial Financial Statements in the UK. SLC is owned by the Accounts of SLC. As at 31 March 4 and has not applied IFRS 16 to application at the same amounts Secretary of State for Education, 2020, there are no insurance arrangements that were previously as under IAS 17 immediately before the Welsh Ministers, the Scottish contracts in issue by SLC with any not identified as a lease under IAS the date of initial application. Ministers and the Minister for the expected cashflow or any profit. 17 and IFRIC 4. Economy in Northern Ireland. On transition to IFRS 16 the 1.2 Impact of New The Company has elected not weighted average incremental The Financial Statements have to include initial direct costs in borrowing rate applied to lease been prepared on an accruals basis Accounting Standards the measurement of the right-of- liabilities recognised under IFRS 16 in accordance with the Companies IFRS 16 Leases use asset for operating leases was 1.990%. Act 2006 and, as appropriate, the in existence at the date of initial In the current year, SLC has applied The Company has benefited from FReM and other guidance issued application of IFRS 16, being 1 April IFRS 16 Leases (as issued by the the use of hindsight for determining by HM Treasury and the Secretary 2019. At this date, the Company IASB in January 2016). IFRS 16 the lease term when considering of State for Education where the has also elected to measure the Leases introduced new or amended options to extend and terminate disclosure requirements of these right-of-use assets at an amount requirements with respect to leases. The tables below show go beyond the Companies Act equal to the lease liability adjusted lease accounting by removing the the amount of adjustment for 2006 and do not conflict. The for any prepaid or accrued lease distinction between operating and each financial statement line item Financial Statements have been payments recognised in the finance leases and requiring the affected by the application of IFRS prepared and approved by the Statement of Financial Position Directors in accordance with recognition of right of use asset 16 for the current year. and a lease liability at the lease immediately before the date of International Financial Reporting initial application and including the Standards as adopted by the EU commencement for all leases, except for short term leases and carrying amount of the dilapidations (Adopted IFRSs) and International provision. Financial Reporting Interpretations leases of low value assets. The Committee interpretations. There impact of the adoption of IFRS Instead of performing an have been no significant changes to 16 on the Financial Statements is impairment review on the right- the FReM during the year. described below. of-use assets at the date of initial application, the Company has Disclosure of Assessment of the As at 1 April 2019, SLC has recognised all right of use assets relied on its historic assessment Impact of Accounting Policies not as to whether leases were onerous yet Adopted and corresponding lease liabilities at the present value of future lease immediately before the date of There is one international payments. This has resulted, during initial application of IFRS 16. accounting standard issued but the year ended 31 March 2020, in On transition, for leases previously not yet required to be applied in an associated depreciation charge accounted for as operating leases the preparation of these Financial and finance cost. with a remaining lease term of less Statements. This is IFRS 17 which than 12 months and for leases of relates to insurance contracts. The new standard has been applied using the modified retrospective low-value assets the Company has This is applicable to annual applied the optional exemptions reporting periods beginning on approach, with the cumulative effect of adopting IFRS 16 to not recognise right-of-use or after 1 January 2021 and assets but to account for the lease requires insurance liabilities being recognised in equity as an adjustment to the opening balance expense on a straight-line-basis to be measured at a current over the remaining lease term. fulfilment value and provides of retained earnings for the current a more uniform measurement period. Prior periods have not been and presentation approach for restated. all insurance contracts. SLC is required to comply with Managing Public Money for any insurance arrangements and does not issue
80 81 Financial Statements 07
7.5 7.5 Notes to the Notes to the Financial Statements Financial Statements
Impact on Statement of Financial Position 31 March 2020 1 April 2019 Impact on Statement of Comprehensive Net Expenditure 2020
£’000 £’000 £’000 £’000 £’000 Impact on property, plant and equipment - - Impact on revenue -
Right-of-use assets (7,333) 20,547 Expenditure:
Impact on intangible assets - - Impact on Staff costs - Total non-current assets (7,333) 20,547 Impact on Restructuring costs - Impact on Depreciation, amortisation and impairments 4,570 Trade and other receivables - (629) Impact on administrative expenses - Cash and cash equivalents - -
Corporation tax - - Impact on operating profit 4,570 Total current assets - (629)
Total assets (7,333) 19,918 Impact on net financing expense 302
Trade and other payables 3,588 (1,096) Impact on (Loss)/profit on ordinary activities before taxation 4,872 Provisions - - Impact on Tax on result of ordinary activities - Corporation tax - - Impact on (Loss)/profit on ordinary activities after taxation 4,872 Total current liabilities 3,588 (1,096)
Total assets less current liabilities (3,745) 18,822
Trade and other payables (13,062) Provisions - - Retirement benefit obligation - - Total non-current liabilities - (13,062)
Net assets/(liabilities) (3,745) 5,760
Called up share capital - - General reserve 3,748 (5,760) Total equity 3,748 (5,760)
82 83 Financial Statements 07
7.5 1.3 Measurement has accordingly been considered 1.6 Use of Estimates and The exceptions to this de minimis 7.5 Convention appropriate to adopt a going Judgement rule include accruals in respect Notes to the concern basis for the preparation of of internal rechargeable resource Notes to the Financial Statements The Financial Statements are the 2019-20 financial statements. The preparation of the Financial costs and project milestone- Financial Statements prepared on the historical cost Statements in conformity with based contracts. Accruals and Progress has been made on basis, with the following exceptions IFRS requires Directors to make prepayments are estimated addressing the longer-term financial which are stated at fair value: judgements, estimates and using the best available sources sustainability of SLC’s defined assumptions that affect the • Financial instruments are of information at the date of benefit retirement and death benefit application of accounting policies classified at fair value in calculation. scheme with the transfer of active and the reported amounts of accordance with IFRS 9 members of the SLC scheme to the assets, liabilities, income and • Retirement Benefit Obligations: • Assets under development are Civil Service Pension Scheme on 1 expenditure. Actual results may SLC’s retirement benefit valued at current cost, calculated March 2020. differ from these estimates. obligations are based on external valuations provided using expenditure incurred to date SLC’s COVID-19 spend to date Estimates and underlying annually by qualified actuaries. and are subject to impairment has been relatively low and the assumptions are reviewed on Key assumptions are based review organisation has transitioned an ongoing basis. Revisions on current market conditions quickly to be able to provide its • Tangible and intangible assets, to accounting estimates are and the discount rate applied, core objectives on student finance: other than assets under recognised in the period in which representing the interest rate used processing applications, tuition development, are stated at the estimates are revised and in any to determine estimated future fee payments to institutions and depreciated historic cost, as this future periods affected. cash outflows anticipated to settle standing up its contact centres after accurately represents their value SLC’s pension obligations. The a temporary closure in late March Information about assumptions and in use pension scheme’s actuary carries 2020. estimation uncertainties that have out triennial valuations. The final 1.4 Going Concern a significant risk of resulting in a 1.5 Unsold Loans material adjustment within the next results as at 5 November 2016 The terms of the Framework financial year are included in the and the indicative review results SLC administers a loan Document between SLC and the following notes: as at 5 November 2019 have Secretary of State for Education, book on behalf of all four UK impacted this set of accounts. the Advanced Learning and administrations. Neither the loans • Provisions: The dilapidations Final results of the valuation dated Science Directorate of the Scottish nor the related obligation to repay provision is based on external 5 November 2019 are expected Government, acting on behalf of the funding bodies is included in valuations provided by SLC’s to be agreed after the signing of Scottish Ministers, the Department the Financial Statements of SLC property consultants. The latest these Financial Statements. for the Economy in Northern Ireland because: formal valuations were provided in March 2018 for premises in • Intangible Assets: Development and the Directorate for Skills, Higher • In accordance with the terms of Darlington and in December costs that meet IFRSs intangible Education and Lifelong learning the SLC Framework Document 2016 for Glasgow Hillington. asset recognition criteria where of the Welsh Government requires any interest earned on funds A new formal valuation for the the assets are intended to be SLC to conduct its affairs so as made available for making loans premises at Bothwell Street was used internally or otherwise, to remain solvent within the total to students and on money repaid conducted as at 31 March 2020. are capitalised as an intangible resources made available to it by to SLC by borrowers under the As the properties other than asset. Capitalisation will only the funding bodies. These Financial scheme shall be returned to the Bothwell Street have lower levels occur when management Statements have been prepared on funding bodies identify the technological and this basis. of dilapidations, assessments for • Under the SLC Framework those have not been revisited due economic feasibility of the Grant-in-Aid for SLC’s business Document, there is an agreement to materiality. Key assumptions project as detailed in 1.10 as usual operating expenditure for between SLC and the funding are based, in addition to below. SLC will test intangible 2020-21 has already been included bodies that SLC is liable to management judgement, on the assets for impairment after initial in the sponsoring departments’ transmit to these bodies only likely obligation at the lease expiry recognition and whenever there estimates for that year, which have those repayments which are date and lease stipulations on the is an indication of impairment. been approved by Parliament. The made to SLC. Therefore, SLC property condition on that expiry Assets under development are total budget has been confirmed is not liable for repayments due date. tested annually. Impairments are by all four shareholders as set which ultimately may not be based on key assumptions made • Accruals and Prepayments: out in the Annual Performance recovered. by management on the value in and Resource Agreement (APRA) SLC recognises accruals use of the intangible asset being Letter 2020-21, as submitted to based on purchase orders and developed. the SLC Board on 30 April 2020. It prepayments where the invoice value is over £10,000 de minimis.
84 85 Financial Statements 07
1.7 Income 1.9 Property, Plant and 7.5 Right-of-use assets Over the term of the lease 7.5 • Revenue Recognition: Revenue Equipment Notes to the Short leasehold improvements Over the unexpired period of the lease Notes to the is recognised net of recoverable Recognition Financial Statements Value Added Tax (VAT) when the Financial Statements Property, plant and equipment Computer and other electronic 3 to 5 years, or the lease period amount of revenue can be reliably is capitalised where: its value is equipment where applicable measured and where probable greater than £5,000 (grouped); it is future economic benefit will flow Furniture, fixtures and fittings Over 8 years, or the lease period held for use in delivering services where applicable to the entity. In the financial year or for administrative purposes; it to 31 March 2020, Grant-in- is probable that future benefits Motor vehicles 3 to 5 years Aid drawn down from the DfE will flow to, or service potential be is recorded on a cash basis in provided to, SLC; it is expected to line with DfE’s own reporting 1.10 Intangible Assets • the intangible asset will generate be used for more than one financial requirements and in line with probable future economic or year; and the cost of the item can Recognition the FReM. Grant-in-Aid will be service delivery benefits be measured reliably. Intangible assets valued greater credited to SLC’s reserves. This than £5,000 are recognised where • adequate financial, technical and is a change in accounting policy Measurement the costs can be measured reliably other resources are available to as Grant-in-Aid was previously Items of property, plant and and there is a clear future benefit or SLC to complete the development recorded on an accruals basis equipment are initially measured at service potential attributable from and use the asset within revenue, with further cost, representing the costs directly the asset that will flow to SLC. • SLC can reliably measure the information on the change within attributable to the acquisition or expense attributable to the asset note 19. construction of the asset. SLC determines phases during each project’s life cycle. during development • Finance Income: Finance income Revaluation and Impairment Only expenditure directly comprises interest income on The assets’ residual values and 1. Discovery funds invested and is recognised attributable to the cost of useful lives are reviewed, and 2. Inception developing software in-house as it accrues in the SOCNE. adjusted if appropriate, at the date 3. Delivery and Implementation is capitalised. Costs directly 1.8 Taxation of each SOFP. Apart from right-of- attributable are capitalised by way use assets as detailed at 1.2 above, 4. Run and Warranty of an estimated standard cost for Tax on the profit or loss for the assets are valued at depreciated As costs accumulate during the each development team. Any other year comprises current tax. Tax is historical cost. There is no discovery and inception phases, expenditure is taken to the SOCNE recognised in the SOCNE. revaluation reserve balance within expenditure is not capitalised, as as an expense. the Statement of Financial Position, Current tax is the expected tax due feasibility is only determined at the as SLC does not have a policy of Websites represent website on the taxable profit or loss for the end of these stages. A stage gate revaluing its assets. developments for delivering year and any adjustment to tax due report or alternative equivalent specific services to customers in in respect of previous years. Gains and losses on disposal of assessment is used to determine the payment and repayment of an item of property, plant and each project as ready for delivery. VAT is accounted for in the Financial products within the portfolio. equipment are determined by Statements, in that amounts are Expenditure on delivery and comparing the proceeds from Implementation costs in relation to shown net of VAT with the following implementation is then capitalised disposal with the carrying amount cloud-based developments are also exceptions: where all the following can be of property, plant and equipment, capitalised and held within internally demonstrated in accordance with • Irrecoverable VAT on revenue and are recognised within other generated software. IAS 38: is charged to the SOCNE and administrative expenses in the included under the relevant SOCNE. • The project is technically feasible expenditure heading to the point of completion and will Depreciation result in an intangible asset for • Irrecoverable VAT on the purchase Depreciation is charged on all use in the provision of services to of an asset is included in non- property, plant and equipment SLC or to SLC customers current asset additions when substantially all the risks and • SLC intends to complete the • The net amount due to HM rewards of the asset have been asset and use it Revenue and Customs in respect transferred to SLC. It is calculated of VAT is included within trade to write off the cost of each asset • SLC could use the asset and other payables within the less estimated residual value evenly SOFP. over its expected useful life as follows:
86 87 Financial Statements 07
7.5 Measurement for impairment, and adjusted if 1.12 Financial Instruments As at the date of the SOFP, SLC 7.5 appropriate, at the date of each has financial liabilities included All intangible assets recognised (a) Financial Assets Notes to the have finite useful lives and are SOFP. The assets are valued at as current liabilities comprising of Notes to the Financial Statements measured at cost less accumulated depreciated historical cost. Classification ‘trade and other payables’ in the Financial Statements SOFP. amortisation and impairment Amortisation IFRS 9 requires financial assets to losses. In accordance with the Amortisation is calculated over be measured at either amortised Recognition and Measurement assessment of capitalisation the life of the asset. Amortisation cost or fair value. Changes in fair Financial liabilities are recognised methods for software development is recognised in the SOCNE on a value should either be reflected in when SLC becomes party to conducted, the cost for internally straight-line basis over the useful profit or loss in the Statement of the contractual provisions of the generated intangible assets has life of intangible assets from the Comprehensive Net Expenditure financial instrument. been assessed as the direct labour date that they are available for use, (SOCNE) or taken to ‘other and management costs directly A financial liability is removed from since this most closely reflects the comprehensive income and attributable to the development of the SOFP when it is extinguished, expected pattern of consumption expenditure’ (OCI) with no recycling. the intangible asset. that is when the obligation is of the future economic benefits As at the date of the SOFP, SLC discharged, cancelled or expired. Revaluation and Impairment embodied in the asset. The has financial assets included in expected useful lives for the current current assets; these comprise of The assets’ residual values ‘balances with central government 1.13 Provisions and useful lives are reviewed and comparative year are as follows: bodies’, ‘other trade receivables’, Provisions are recognised when: ‘prepayments and accrued income’ • There is a present legal or Internally generated software 3 to 10 years and ‘cash and cash equivalents’. constructive obligation as a result Recognition and Measurement of past events Websites 5 years Financial assets are recognised • It is more likely than not that when SLC becomes party to an outflow of resources will be Software licences Over the period of the licence the contractual provisions of the required to settle the obligation financial instrument. These assets are recognised at amortised cost. • The amount can be reliably Amortisation methods, useful lives charge up to 31 March 2019. Financial assets are de-recognised estimated and residual values are reviewed at when the rights to receive the cash Due to the changes in revenue The provision’s value is discounted the end of each financial year and flows from the assets have expired recognition and associated when the time value of money is adjusted if appropriate. or have been transferred and SLC treatment of both revenue and considered material. Changes in has transferred substantially all the discount rate applied will be 1.11 Deferred Capital capital Grant-in-Aid as note 1.7 risks and rewards of ownership. above, this deferred funding has recognised in the year in which the Receipts been released to the Statement of Trade and other receivables change occurred. The discount rate applied is in line with HM Treasury’s Funding received from the funding Changes in Taxpayers’ Equity and represent other trade receivables Public Expenditure System bodies in prior years for the there will be no further movement and the outstanding balances with Announcement of Rates which was purpose of acquisition of property, after 1 April 2019. central government bodies. published on 6 December 2019. plant and equipment and intangible Cash and cash equivalents assets was credited to the represent cash in hand, and Comparative figures are not deferred capital receipts account deposits held with banks, excluding adjusted as this would constitute a and released to the SOCNE by deposits held in trust for the change in accounting estimate. amounts equal to the associated payments and repayments of depreciation and amortisation student funding. (b) Financial Liabilities Classification Changes in fair value should be reflected through the SOCNE. The classification depends on the purpose for which the financial liabilities were issued. Management determines the classification of its financial liabilities at initial recognition.
88 89 Financial Statements 07
7.5 1.14 Employee Benefits Student Loans Company Limited The calculation is performed NOW: Pensions 7.5 Retirement and Death Benefits by a qualified actuary using the Contributions are recognised in Short Term Benefits Notes to the Scheme projected unit credit method. When the SOCNE as they are incurred. Notes to the Financial Statements Short term employee benefit The scheme is defined under the calculation results in a benefit to SLC has no further liability once Financial Statements obligations are measured on the Pensions Act 1993 (part 1). SLC, the recognised asset is limited contributions are paid to the an undiscounted basis and are It operates in accordance with to the present value of benefits pension scheme. expensed as the related service is the Pension Act 1995 as a trust, available in the form of any future Civil Service Pension Scheme provided. A liability is recognised, established by its Definitive Trust refunds from the plan, reductions in for the amount expected to be Deed and Rules (June 2004). The future contributions to the plan or The scheme provides benefits on a paid under a short-term cash scheme is legally separated from on settlement of the plan and takes career-average basis, with a normal performance related award, if SLC SLC and governed by the Board of into account the adverse effect of pension age equal to the member’s has a present legal or constructive Trustees which has control over its any minimum funding requirements. state pension age (or 65 if higher). obligation to pay this amount as a operation, funding and investment Actuarial gains and losses that arise These statutory arrangements are result of past service provided by strategy. The Board is chaired are recognised by SLC in the year unfunded, as the cost of benefits is the employee and the obligation by an independent trustee and is they occur through the SOCNE. met by monies voted by Parliament can be estimated reliably. The cost comprised of nominees of SLC each year. Pensions payable of annual leave earned but not The defined benefit scheme and elected scheme members. under nuvos and alpha schemes taken by employees at the date exposes SLC to actuarial risks such The scheme is regulated by the are increased annually in line with of the SOFP is recognised in the as longevity risks, interest rate risk Pensions Regulator, and its Annual and market (investment) risk. pensions increase legislation. Financial Statements to the extent Report and Accounts are subject Employee contributions are salary- that employees are permitted to to audit by an independent auditor. The Board of Trustees regularly related for both nuvos and alpha. In carry forward leave to the following SLC is the ‘principal employer’ and review the scheme’s investment nuvos there is a final salary section year. as such, retains responsibilities strategy in order to manage the investment risks within the scheme. which is closed to active accrual. Pension Arrangements within the Definitive Trust Deed and Neither SLC nor employees are Rules. The scheme invests in a broad During the year until the end of range of asset classes with a target contributing actively to the nuvos February 2020, SLC contributed The defined benefit scheme allocation under the new strategy of scheme, as it is a closed scheme. to the SLC Pension Scheme which provides a pension and lump sum 60% in matching assets and 40% For transferred service to nuvos was a defined benefit scheme that based on pensionable service and in growth assets. The statement of final salary section, benefits remain all employees had the option to final pensionable salary. The final Investment Principles sets out the linked to the members’ final salary join, and NOW : Pensions, a defined pensionable salary is the average investment strategy adopted by the at retirement and the dependant’s contribution scheme, which met of the best three continuous trustees. benefits will reflect the provisions SLC’s statutory obligations to enrol pensionable salaries in the ten of the SLC Pension Scheme with all employees in a pension scheme. years before retirement. Benefits UK legislation requires the Board an increase in the current spouse’s are also accessible to a spouse on of Trustees to carry out valuations SLC then became a member pension in nuvos from 37.5% the death of a scheme member. at least every three years and to of the Civil Service Pension target full funding against a basis (or member’s pension) to 50%. Arrangements and made the alpha SLC’s net obligation in respect that prudently reflects the scheme’s Benefits in alpha build up with an and partnership schemes available of the defined benefit pension risk exposure. The most recent accrual rate of 2.32%. In all cases, to all its employees from 1 March plan is calculated by estimating valuation was carried out as at 5 members may opt to give up 2020. The transfer arrangements the amount of future benefit that November 2019. (commute) pension for a lump sum are detailed in note 16. employees have earned in return up to the limits set by the Finance As at 31 January 2020, the defined For those SLC staff in the for their service in the current Act 2004. and prior years. That benefit is benefit scheme was closed to new existing NOW: Pensions defined The partnership pension account is discounted to determine its present members, and as at 29 February contribution scheme, they still a stakeholder pension arrangement. value, and the fair value of any plan 2020, the defined benefit scheme have the option to remain in NOW: The employer makes a basic assets (at bid price) is deducted to was closed to any further accrued Pensions or to accrue future contribution of between 8% and determine the net obligation. The benefits. benefits in alpha. Non-members of 14.75% (depending on the age of liability discount rate is the yield a pension scheme were also able the member) into a stakeholder at the SOFP date on ‘AA’ credit to join alpha from 1 March 2020, pension product. Legal & General rated bonds denominated in the with all staff members who join are the current provider. alpha then having a further option currency relating to the terms of the to switch to join partnership shortly bonds and having maturity dates thereafter. approximating to the terms of SLC’s obligations.
90 91 Financial Statements 07
7.5 The employee does not have to Interest on leases is charged to the 2. Segmental reporting 7.5 contribute, but where they do make SOCNE in the year to which the Notes to the contributions, the employer will lease payment relates. Segmental information can be analysed as follows for the reporting years Notes to the match these up to a limit of 3% of under review: Financial Statements Leases which are low in value or Financial Statements pensionable salary (in addition to represent a short-term lease of up the employer’s basic contribution). to 12 months are recognised as Employers also contribute a expenses on a straight-line basis 2020 2019 Restated further 0.5% of pensionable salary and charged to the SOCNE in the to cover the cost of centrally Operating Business Change Evolve Total Operating Change Total year to which they relate. provided risk benefit cover (death Expenditure Optimisation Programme Programme Expenditure Programme and in service and ill-health retirement). 1.16 Segmental Reporting - Maintenance Further details about the civil service pension arrangements can Operating segments are reported £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 be found at the website: www. in a manner consistent with the Segmental civilservicepensionscheme.org.uk internal reporting as provided to the Revenue: ELT, Board and to DfE. The chief Grant income 105 - - - 105 111 - 111 Other Obligations operating decision maker, who is Termination benefits are payable responsible for allocating resources Administration fees receivable when employment is ceased either and assessing performance of the 1,200 - - - 1,200 893 - 893 from third before the normal retirement date, operating segments, has been parties the date implied in contractual identified as the Chief Executive Other income 25 - - - 25 16 - 16 terms and conditions, or when Officer (CEO). an employee accepts voluntary Total revenue 1,330 - - - 1,330 1,020 - 1,020 The CEO reviews performance redundancy for these benefits. based on four segments: Operating SLC recognises termination Budget, Business Optimisation and Segmental benefits when it is demonstrably Maintenance, Change Programme Expenditure: committed to either: terminating the and Evolve and this is the basis Total employment of current employees (139,439) (6,485) (28,399) (19,371) (193,694) (179,667) (44,092) (223,759) for SLC’s reporting to DfE. The expenditure according to a detailed formal plan Operating Budget represents day to Operating without possibility of withdrawal; (138,109) (6,485) (28,399) (19,371) (192,364) (178,647) (44,092) (222,739) day operating activities undertaken profit/(loss) or providing termination benefits by SLC. The Business Optimisation Capital as a result of an offer made to (3,916) - (21,403) (12,839) (38,158) (23,975) (32,030) (56,005) and Maintenance activities expenditure encourage voluntary redundancy. represents systems maintenance Total 1.15 Leases and enhancements to the day to Segmental (142,025) (6,485) (49,802) (32,210) (230,522) (202,622) (76,122) (278,744) day activities of SLC. The Change Expenditure Leases are capitalised at the Programme represents additional present value of the minimum lease activities undertaken by SLC in Segmental information after operating profit before interest and tax has not been provided on payments at the inception of the the financial year to create new the basis that these costs are determined at corporate level and are not separately reportable lease and a liability recognised for activities. On completion, these to management. the same amount. Leased assets activities will become part of the are depreciated over the shorter operating activities in subsequent SLC has updated this note to bring it in line with the internal reporting for the company and of the asset’s useful life and the years. The Evolve Programme has removed the geographical split as this is not relevant for either internal or Board reporting lease term. Each lease payment represents the transformation purposes. Business Optimisation and Maintenance and Evolve are new reporting structures is allocated between the principal programme. put in place in the 2019-20 reporting year, and so there is no prior year comparative analysis capital component and finance for these areas. charges. The finance charges are allocated to each period during the lease term in order to produce a constant periodic rate of interest on the remaining balance of the liability.
92 93 Financial Statements 07
7.5 7.5 Notes to the Financial Statements Notes to the Financial Statements 3. Revenue 4. Net expenditure before interest and tax
2020 2019 Restated (a) This is stated after charging or (crediting):
£'000 £'000 2020 2019 Restated Grant income 105 111 £'000 £'000 Administration fees receivable from third parties 1,200 893 Dilapidations provision (991) 522 Other income 25 16 Depreciation, amortisation and impairments - owned assets 41,112 34,248 1,330 1,020 Net loss on disposal of fixed assets 169 205 Directors' remuneration 670 643 In accordance with the FReM, the bursary, scholarship or future economic benefit for the NDPBs are required to provide fee waiver entitlement to the service will be capitalised in line Auditors remuneration: additional analysis on the student. The core service is an with company policy as set out services for which a fee is information-only service. in note 1. - Audit of these financial statements 144 100 charged. Details of the bursary Financial Objective Any net surplus will be Professional fees: - and scholarship schemes that The main financial objective of reinvested to ensure continued SLC operates are detailed - Independent complaints assessors 240 225 the HEP subscribers is to utilise systems enhancement to below: the service as a low-cost way of improve efficiencies in the end - Pension advisors 187 44 Bursary Administration executing their commitments, to end process. Any net deficit - Internal audit feesw 738 - Service in their Fair Access Plans (or will be fully funded in the next Amounts received by former auditors and their associates: - SLC supports HEPs in England, equivalents), to provide financial financial year. Northern Ireland, Scotland and support to students recruited The inclusion of the analysis of - Valuation and actuarial services - 14 Wales, in providing mandatory into HE under widening income and expenditure relating - Other services relating to taxation - 3 and discretionary bursaries, participation agendas. The to services for which a fee is scholarships and fee waivers level of subscription is intended charged is provided below to Operating Lease Rentals: to students, by providing an to both pay for the planned ensure compliance with the - Land and buildings 120 3,378 administration service. HEPs operational costs incurred by FReM, and not to comply with may subscribe to the full service SLC and to fund a programme IAS 8. Other consultancy costs included costs for data migration, IT and digital print solutions and or the core service. The full of ongoing enhancements. amounted to £7.7m (2019: £10.3m) during the year. service includes payment of Enhancements that provide (b) Directors’ remuneration:
2020 2019 Restated 2020 2019 Restated
£'000 £'000 £'000 £'000 Revenue 762 609 Fees 145 148 Expenditure (762) (609) Executive emoluments (including benefits in kind) 463 413 Surplus before tax - - Pension contributions 46 63 Taxable expenses 16 19
2020 2019 Restated 670 643
£'000 £'000 The remuneration of each individual Director is analysed in the Remuneration and Staff Report. The highest paid Director during the year was the CEO, Paula Sussex, with a salary of £190,000 Capital expenditure - 245 (2019: £110,400). Deferred capital receipts - (245)
94 95 Financial Statements 07
7.5 7.5 Notes to the Financial Statements Notes to the Financial Statements 5. Staff costs 7. Finance costs The aggregate payroll costs were as follows: 2020 2019 2020 2019 £'000 £'000 £'000 £'000 Pension interest charge 495 461 Wages and salaries 88,071 78,476 Pension administration expenses 927 639 Social security costs 7,968 7,055 Lease finance charge 302 - Pension service costs 10,026 9,707 1,724 1,100 Gain on settlement at transfer of pension fund (see note 16) (42,291) - 63,774 95,238 8. Tax results on ordinary activities Other staff costs 4,707 3,611 2020 2019 Total Staff Costs 68,481 98,849 £'000 £'000 Current taxation refund for the period at the small companies’ Pension service costs include employer’s contributions of £18.2m to the (3) (1) SLC Pension Scheme, £733,000 to NOW: Pension, and £1.1m to the new rate of 19% (2019: 19%) partnership and alpha pension schemes, with a credit adjustment of £10m Stamp Duty Land Tax 6 - due to the net expected return on asset on the IAS 19 valuation of the Tax on result of ordinary activities 3 (1) pension scheme. The net gain on settlement of £42.3m relates to the bulk transfer of active Tax is chargeable at 19% of the taxable profits arising on administration fees receivable from members of the defined benefit pension scheme to the Principal Civil third parties, after charging the costs associated with the administration of the associated Service Pension Scheme (“nuvos” section) on 1 March 2020. service, plus bank interest. Other staff costs represent the additional cost to SLC for agency workers, The tax assessed for the year varies from the standard rate of corporation tax in the UK (19% in contractors, the apprenticeship levy and other indirect staff costs. 2020 and 2019). The differences are explained below: Restructuring costs of £209k (2019: £84k) represents the accrued severance payments made in year. Full details of the number of payments and corresponding costs on a cash basis are included in the 2020 2019 Remuneration and Staff Report, and the movement in the provision for severance is set out in note 15. £'000 £'000 Loss on ordinary activities before taxation (194,071) (223,825) 6. Finance income Loss on ordinary activities subject to small companies’ UK corporation tax rate (36,873) (42,527) The loss subject to corporation tax is broken down as follows: 2020 2019 Amounts not subject to corporation tax 36,870 42,527 £'000 £'000 Reversal of prior year liability - (1) Bank interest 17 14 Current taxation refund for the period (3) (1)
At the 2015 summer budget, the Government announced legislation setting the corporation tax main rate (for all profits except ring-fenced profits) at 19% for the years starting 1 April 2017, 2018 and 2019 and at 18% for the year starting 1 April 2020. At the 2016 budget, the Government announced a further reduction to the corporation tax main rate (for all profits except ring-fenced profits) for the year starting 1 April 2020, setting the rate at 17% or similar, given the announcements to date. Legislation was introduced in the Finance Bill 2020 to amend the main rate of Corporation Tax for all non-ring-fenced profits to 19% for financial year 2020. The Corporation Tax charge will also be set at 19% for all non-ring fence profits for financial year 2021.
96 97 Financial Statements 07
7.5 7.5 Notes to the Financial Statements Notes to the Financial Statements 9. Property, plant and equipment 10. Intangible assets
Short Computer Furniture, Motor Assets Right of Total Intangible assets Internally Websites Software Total leasehold and other fixtures and vehicles under Use under development generated licences improvements electronic fittings construction software equipment £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Cost Cost At 1 April 2018 (restated) 29,917 83,441 3,671 11,079 128,108 At 1 April 2018 (restated) 14,885 14,427 3,146 79 2,133 - 34,670 Additions 31,474 - 20 785 32,279 Additions 1,448 2,644 883 54 364 - 5,393 Disposals - - - (557) (557) Disposals (1,358) (1,199) (529) (47) - - (3,133) Transfer (43,747) 43,727 20 - - Transfers 2,091 - - - (2,091) - - Impairment (581) (308) - (337) (1,226) Impairment - (100) - - - - (100) At 31 March 2019 and 17,063 126,860 3,711 10,970 158,604 At 31 March 2019 and 1 1 April 2019 (restated) 17,066 15,772 3,500 86 406 - 36,830 April 2019 (restated) Adjustments 209 (208) (2) (1,846) (1,847) IFRS 16 adjustment 1 Additions 34,010 - - 2,005 36,015 April 2019 - - - - - 20,547 20,547 Disposals - - - (525) (525) Adjustments - (92) - - - - (92) Transfers (24,795) 24,776 19 - - Additions 401 2,468 688 18 1,445 230 5,250 Impairment (255) - - (594) (849) Disposals (1,274) (344) (15) (18) - (2,993) (4,644) At 31 March 2020 26,232 151,428 3,728 10,010 191,398 Transfers 999 - 37 - (1,036) - - Impairment - (888) - - - - (888) Amortisation At 31 March 2019 17,192 16,916 4,210 86 815 17,784 57,003 At 1 April 2018 (restated) - 26,110 3,290 7,204 36,604 Charge for the year - 25,322 388 2,116 27,826 Depreciation Disposals - - - (557) (557) At 1 April 2018 (restated) 7,563 9,210 1,738 17 - - 18,528 Charge for the year 1,577 3,198 295 26 - - 5,096 At 31 March 2019 and On disposals (1,148) (1,191) (526) (27) - - (2,892) 1 April 2019 (restated) - 51,432 3,678 8,763 63,873 At 31 March 2019 and 7,992 11,217 1,507 16 - - 20,732 Adjustment - - - (1,846) (1,846) 1 April 2019 (restated) Charge for the year - 29,853 14 1,054 30,921 Adjustments - (92) - - - - (92) Disposals - - - (525) (525) Charge for the year 1,939 2,535 392 27 - 4,644 9,537 Impairment - - - (461) (461) On disposals (1,115) (334) (9) (9) - (71) (1,538) At 31 March 2020 - 81,285 3,692 6,985 91,962 Impairments - (551) - - - - (551) Net book value At 31 March 2020 8,816 12,775 1,890 34 - 4,573 28,088 At 1 April 2019 (restated) 17,063 75,428 33 2,207 94,731 Net book value At 31 March 2020 26,232 70,143 36 3,025 99,436 At 1 April 2019 (restated) 9,074 4,555 1,993 70 406 - 16,098 At 31 March 2020 8,376 4,141 2,320 52 815 13,211 28,915 Amortisation for intangible assets is recognised as a charge in the SOCNE. Assets under Development represent the ongoing internal development of SLC’s systems to allow the The refurbishment of parts of the leased premises on Bothwell Street, Glasgow and Hillington and the replacement delivery of services to customers and the policy change requested by the shareholders. The completed of the cooling towers at Bothwell Street, Glasgow were included in the category Assets under Construction. On developments to date are included within Internally Generated Software. completion of the work in the current financial year, the costs were transferred to short leasehold improvements and capitalised in the financial year to 31 March 2020.
98 99 Financial Statements 07
7.5 Notes to the Financial Statements 7.5 11. Financial instruments Notes to the Financial Statements As the cash requirements of SLC are to SLC if a customer fails to meet provides assurance that funding of 12. Trade and Other Receivables met through Grant-in-Aid, financial their contractual obligations. its activities will continue. Cashflows instruments play a more limited role Other trade receivables comprise are presented to the Department 2020 2019 Restated in creating and managing risk than sums due from third party portfolio for Education on a weekly basis, would apply to a non-public sector administration and HEPs for the and any cash flow requirements £’000 £’000 body. Most financial instruments are forthcoming as required. SLC bursary administration service. 94% Amounts falling due within one year: relate to contracts to buy non- of other trade receivables are not is therefore not exposed to any financial items in line with SLC’s older than 3 months and do not material liquidity risks. Other trade receivables 1,766 1,606 expected purchase and usage represent any credit risk, therefore Market and Currency Risk VAT 1,058 - requirements and SLC is therefore no allowance for credit loss is SLC does not borrow or invest Prepayments and accrued income 4,884 5,031 exposed to little liquidity or market required. funds. Financial assets and liabilities risk. Credit risk exists for trade and 7,708 6,638 Liquidity Risk are generated by day to day other receivables, which are detailed activities and are not held to manage in note 12. SLC’s net revenue resource requirements and capital the risks facing SLC in undertaking Amounts falling due after more than one year: Credit Risk its activities. The Financial expenditure requirements are Prepayments and accrued income 127 159 Credit risk arises from cash and financed by fees charged to Statements are presented in ‘Pound cash equivalents, deposits with universities and colleges and Grant- Sterling’(£), which is SLC’s functional Total trade and other receivables 7,835 6,796 banks and other institutions, as well in-Aid funded by Parliament. The and presentation currency. SLC as credit exposure to customers. For Annual Performance and Resource does not ordinarily enter foreign banks and other institutions, only Agreement letter, which confirms currency transactions. The carrying 13. Cash and Cash Equivalents independently rated parties with a the top-level budget delegated to value approximates to the fair value minimum rating of ‘A’ are accepted. SLC, for the financial year 2020-21 due to the short maturity of the 2020 2019 Restated Credit risk is the risk of financial loss has been presented to SLC and instruments. £’000 £’000
2020 2019 Restated Balance at 1 April 17,305 12,450 Book Value Fair Value Book Value Fair Value Net increase/(decrease) in cash and cash equivalents (11,302) 4,855 £’000 £’000 £’000 £’000 Balance at 31 March 6,003 17,305 Trade receivables due within 1 year 7,708 7,708 6,637 6,637 The balances at 31 March were held at: Trade receivables due after 1 year 127 127 159 159 Government banking scheme accounts 5,999 17,297 Cash and cash equivalents 6,003 6,003 17,305 17,305 Trade payables due within 1 year 29,745 29,745 30,833 30,833 Cash vouchers 4 8 Trade payables due after 1 year 9,399 9,399 - - 6,003 17,305
At 31 March 2020 £73,080,000 (31 March 2019: £64,336,000) was held in trust on The maturity analysis of lease liabilities that shows the remaining contractual maturities are shown below. behalf of third parties. End Date of lease Lease liability £’000 Darlington Building 13 27/04/2023 151 Darlington Memphis Building 28/04/2023 2,803 Llandudno 23/06/2023 - Bothwell Street 24/12/2023 7,334 Europa 24/12/2023 1,745 Darlington Studios 13/08/2024 557 Hillington 15/08/2025 690 Total liability 13,280
100 101 Financial Statements 07
7.5 7.5 Notes to the Notes to the Financial Statements Financial Statements 14. Trade and other payables 15. Provisions Severance Legal Dilapidations Deferred lease Total 2019 2020 2019 Restated costs improvement
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 At 1 April 2019 100 571 5,012 376 6,059 5,482 Amounts falling due within one year: Arising in year 24 100 329 32 485 1,248 Trade payables 6,600 1,887 Amounts utilised (124) (108) (1,772) (290) (2,294) (530) VAT - 5,835 Amounts reversed unutilised to the SOCNE - (463) (1,320) (10) (1,793) (141) Other taxation and social security 2,033 1,869 At 31 March - 100 2,249 108 2,457 6,059 Accruals and deferred income 17,448 21,242
Lease liability 3,664 - Amounts falling due within one year - 100 - 35 135 1,024
29,745 30,833 Amounts falling due after more than one year - - 2,249 73 2,322 5,035 As at 31 March - 100 2,249 108 2,457 6,059 Amounts falling due after more than one year: Lease liability 9,399 - The provision for legal claims represents the estimated cost to SLC for ongoing legal work. The provision is the best estimate, based on the value of the claims made and Total trade and other payables 39,144 30,833 the circumstances surrounding the claims. The provision for dilapidations represents the estimated settlement cost to SLC of the dilapidation’s clauses included in its property leases. These costs are expected to be incurred on the termination of the property leases as follows: £257,000 in August 2025, £90,000 in August 2024, £1,151,000 in December 2023 and £751,000 in April 2023. The provision has been made based on the best estimate using independent professional assessments. Deferred lease improvement represents future improvements to the leased property on Bothwell Street which are part of the specific works required under the terms of the lease agreement until its expiration.
102 103 Financial Statements 07
7.5 16. Retirement benefit obligation A small number of members with more than 2 years’ service 7.5 have elected to obtain GCETV quotes prior to transfer to nuvos Until 1 March 2020, SLC operated section) on 1 March 2020 where Notes to the final salary section and have the option of taking the GCETV Notes to the the SLC Pension Scheme for all they retained their salary link. or transferring their benefits to nuvos final salary section by 30 Financial Statements permanent staff. This scheme was Financial Statements The difference between the liability August 2020. As at 31 March 2020, they have been classed as a defined benefit scheme that recognised by the scheme at having remained in the retained scheme and it is assumed they provides benefits based on final the transfer date and the value will accept the GCETV. As a result, a negative past service cost, pensionable salary. The assets of the assets transferred to the i.e. a credit, in respect of the remaining members has arisen of the scheme have been held civil service scheme has been on curtailment at 29 February of £2.0m. An allowance for a separately from those of SLC, being recognised in a net settlement curtailment to reflect the breaking of their salary link has therefore invested by the Trustees of the gain of £42.3m arisen in respect of been calculated. scheme. the bulk transfer at 1 March 2020. A reconciliation of the scheme movements to the SOFP On 1 March 2020 SLC became This net settlement gain has been is given below: a member of the Civil Service reduced by the accrued payment Pension Arrangements and made due by the end of June 2020 for the alpha and partnership schemes £3.8m and has resulted in a surplus Reconciliation to Statement of Financial Position 2020 2019 available to all its employees. As in the IAS 19 valuation of the SLC £’000 £’000 £’000 £’000 agreed with Cabinet Office, SLC Pension Scheme as at 31 March Opening Pension Net Liability 31,138 23,227 transferred all the active members 2020. of the SLC Pension Scheme to Under the Scheme rules, if the Interest Costs 1,422 1,100 CSPA alpha and provided non- actuary certified that there is Employer contributions (17,603) (11,521) scheme members with the options sufficient surplus in the scheme, Other staff costs 7,619 9,389 of joining alpha, partnership, or the trustees may be liable to pay remaining a non-pension member all or part of the surplus to the until next re-enrolment date when employer, however this is subject to Actuarial (gain) in fair value of plan assets (5,382) (2,518) they would be auto enrolled into specific funding rules. The Scheme Actuarial (gain)/loss in defined benefit obligation: alpha. actuary would have to certify that - effect of changes in demographic assumptions (256) (1,735) These statutory arrangements are the scheme liabilities are fully unfunded, as the cost of benefits funded under an actuarial valuation - effect of changes in financial assumptions 16,118 13,196 is met by monies voted by conducted under the Pensions Act - effect of experience adjustments (1,322) - Parliament each year. Details of 1995 (as amended) and SLC does Total actuarial loss 9,158 8,943 the scheme can be found at: not propose to request a refund www.civilservicepensionscheme. given that is not the current position org.uk of the Scheme. Gain on settlement at transfer of pension fund (42,291) - At 29 February 2020, the SLC Members with less than 2 years’ Pension Scheme closed to future service have had their salary link Net (asset)/liability as at 31 March (10,557) 31,138 accrual of benefits and most active broken and been given the option members were transferred (‘bulk of either a refund of contributions transfer’) to the Principal Civil or an enhanced cash transfer sum, Service Pension Scheme (‘nuvos’ payable by 28 February 2021.
104 105 Financial Statements 07
7.5 SLC made employer pension contributions of 45.4% based on salaries 7.5 (31 March 2019: 27.1%) to the pension scheme after agreement with the The benefit obligations are estimated based on the projected unit cost Notes to the Trustees in January 2015 to address the deficit of the scheme at method. They have been rolled forward from a projection from the results Notes to the Financial Statements that time. of the scheme’s statutory funding valuation as at 5 November 2016 to the Financial Statements SLC has also paid additional monthly contributions during the year year-end measurement date. as follows: • £300,000 in respect of the shortfall in funding as agreed in the recovery Change in defined benefit obligation 2020 2019 plan of April 2018. From April 2020 onwards, these monthly contributions were due to increase to £1,691,667, however on a cash basis, SLC has £’000 £’000 £’000 £’000 maintained the payments at £300,000 per month. Benefit obligation at 1 April 170,813 146,536 • £31,389 due to an additional liability of £1,130,000 because of a strain Current service cost 9,639 8,539 on salary from the salary increase estimates applied at the last triennial valuation on 5 November 2016. These payments were scheduled to GMP equalisation - 850 continue until March 2022. Past service costs (2,020) - These increases to employer contribution were expected to eliminate (Gain) on settlements (42,291) - the shortfall in the pension scheme by 1 April 2024. A new schedule of Settlement payments from plan assets (76,498) - contributions has now been agreed on completion and agreement of the retrospective actuarial valuation as at 5 November 2019. Interest cost 4,038 3,930 Benefits paid (1,184) (1,986) Plan participants' contributions 1,782 1,721 Net defined (asset)/liability reconciliation 2020 2019 Insurance premiums for risk benefits (238) (238) £’000 £’000 Actuarial (gain)/loss: Opening net defined benefit liability 31,138 23,227 Defined benefit cost included in Statement of Comprehensive - effect of changes in demographic assumptions (256) (1,735) Net Expenditure (33,250) 10,489 - effect of changes in financial assumptions 16,118 13,196 Total re-measurements 9,158 8,943 - effect of experience adjustments (1,322) - Employer contributions (17,603) (11,521) Total actuarial (gain)/loss 14,540 (11,461) Net (asset)/liability (10,557) 31,138 Benefit obligation as at 31 March 78,581 170,813
* An allowance for GMP equalisation was based on an approximate impact analysis conducted by the actuary in the year ended 31 March 2019. It was treated as a past service cost during that year. Amounts recognised in the Statement of Financial Position 2020 2019
£’000 £’000 Change in fair value of plan assets 2020 2019 Present value of funded obligations 78,581 170,813 £’000 £’000 Fair value of plan assets (89,138) (139,675) Fair value of plan assets at 1 April 139,675 123,309 Deficit for funded plans (10,557) 31,138 Interest income 3,543 3,469 Effect of ceiling / onerous liability at end of year - - Employer contributions 17,603 11,521 Net (asset)/liability (10,557) 31,138 Settlement payments from plan assets (76,498) - Plan participants' contributions 1,782 1,721 Benefits paid (1,184) (1,986) Administrative expenses (927) (639) Insurance premiums for risk benefits (238) (238) Actuarial gain 5,382 2,518 Fair value of plan assets as at 31 March 89,138 139,675
106 107 Financial Statements 07
7.5 Notes to the Financial Statements 7.5 The assumptions used to determine the actuarial calculations are shown Components of defined benefit cost 2020 2019 below. There have been no changes in methodology since the prior Notes to the £’000 £’000 £’000 £’000 valuation, however the figures for RPI have substantially changed after Financial Statements Current service cost 9,639 8,539 an assessment of deferred members. The weighted average assumptions for defined benefit cost are now the same as the assumptions used to GMP Equalisation / past service costs (2,020) 850 determine the benefit obligations. Total service cost 7,619 9,389 Gain on settlements (42,291) - Weighted average assumptions used to determine benefit 2020 2019 obligations % % Interest cost 4,038 3,930 Discount rate 2.30 2.50 Interest (income) on plan assets (3,543) (3,469) Salary increase rate n/a 3.10 Total net interest cost 495 461 Rate of price inflation (RPI) 2.40 3.10 Administrative expenses 927 639 Rate of price inflation (CPI) 1.90 2.10 Defined benefit cost included in Statement of Comprehensive Net Expenditure (33,250) 10,489 Deferred pension increase rate 1.90 2.10
Re-measurements (recognised in other comprehensive income): Rate of increase of pension in payment 2.40 2.90 Effect of changes in demographic assumptions (256) (1,735) Effect of changes in financial assumptions 16,118 13,196 Weighted average life expectancy for mortality tables used to 2020 2019 Effect of experience assumptions (1,322) - determine benefit obligation years years Return on plan assets (excluding interest income) (5,382) (2,518) Male member age 65 (current life expectancy) 20.70 20.40 Total re-measurements 9,158 8,943 Male member age 45 (life expectancy at aged 65) 21.80 21.50 Total recognised in the Statement of Comprehensive Net Expenditure (24,092) 19,432 Female member age 65 (current life expectancy) 22.70 22.90 Female member age 45 (life expectancy at aged 65) 24.30 24.40 There are now no active members in the SLC Pension Scheme, and so the below table shows the new analysis of the defined benefit obligation by remaining member type: Weighted average assumptions used to determine defined 2020 2019 Defined benefit obligation by participant status 2020 2019 benefit cost % % £’000 £’000 Discount rate 2.30 2.70 Actives - 111,669 Salary increase rate n/a 3.00 Vested deferrals 62,602 44,342 Rate of price inflation (RPI) 2.40 3.00 Retirees 15,979 14,802 Rate of price inflation (CPI) 1.90 2.00 Total 78,581 170,813 Deferred pension increase rate 1.90 2.00 The previously held equity instruments, real estate and funds were realised prior to the transfer of assets and Pensions-in-payment increase rate 2.40 2.80 liabilities to the Civil Service Pension Arrangements. Assets held on behalf of the remaining scheme are now limited to cash and debt instruments:
Fair value of plan assets with a quoted market price 2020 2019 £’000 £’000 Cash and cash equivalents* (1,000) 7,776 Equity instruments - 28,913 Debt instruments 90,138 79,267 Real estate - 10,503 Diversified fund growth - 13,216 Total 89,138 139,675 Actual return on plan assets 8,924 5,987
* The balance of the Trustees’ bank account as at 31 March 2020 was £2,120,000 (31 March 2019: £1,541,000) and has been included in the fair value of assets above.
108 109 Financial Statements 07
7.5 Sensitivity analysis: Contributions 7.5 Notes to the The funded status of the scheme and the amounts recognised as a company SLC expects to contribute £21,277,000 (31 March 2019: £17,492,000) to its Notes to the liability as at 31 March 2020 and projected at 31 March 2021 are compared to pension plan in the financial year ending 31 March 2021 as per the projections Financial Statements the corresponding amounts given a range of sensitivities below. below based on the triennial actuarial valuation on 5 November 2016 and the Financial Statements 2019 indicative triennial review results. Sensitivities from Base 2020: Change in defined benefit obligation Projected 2021 Analysis of amounts recognised in the 2019 2020 Minus Plus Minus Plus Mortality: Statement of Financial Position 0.25% 0.25% 0.25% 0.25% Minus one £’000 discount discount inflation rate inflation rate year age rate rate rating Benefit obligation at beginning of year 82,406 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Service cost – (gain)/loss on settlements 2,790
Fair Value of Plan Asset 139,675 92,963 92,963 92,963 92,963 92,963 92,963 Interest cost 1,793 Defined Benefit Obligation 170,813 82,406 83,857 73,728 74,993 82,456 81,683 Benefits paid (1,222) Funded Status 31,138 (10,557) (9,106) (19,235) (17,970) (10,507) (11,280) Settlement payments from plan assets (9,331) Net defined benefit liability, Benefit obligation as at 31 March 76,436 31,138 (10,557) (9,106) (19,235) (17,970) (10,507) (11,280) excluding any effect of asset ceiling Change in fair value of plan assets Projected 2021 Sensitivities from Base 2021: £’000 Analysis of projected defined 2020 2021 Minus Plus Minus Plus Mortality: Fair value of plan assets at beginning of period 92,963 benefit cost 0.25% 0.25% 0.25% 0.25% infla- Minus one Interest income 2,266 discount discount inflation rate tion rate year age rate rate rating Employer contributions 21,277 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Benefits paid (1,222) Current service cost 9,639 ------Settlement payments from plan assets (9,331) Past service cost / GMP Equalisation (2,020) ------Administrative expenses (600) (Gain)/loss on settlements (42,291) 2,790 2,258 3,275 3,235 2,304 2,556 Fair value of plan assets as at 31 March 105,353 Interest expense on defined benefit 4,038 1,793 1,707 1,864 1,711 1,882 1,865 obligation Interest income on plan assets (3,543) (2,266) (2,020) (2,512) (2,266) (2,266) (2,266) Administrative expenses and/or taxes 927 600 600 600 600 600 600 Total defined benefit cost before (33,250) 2,917 2,545 3,227 3,280 2,520 2,755 asset limit
Sensitivities on actuarial assumptions 2019 2020 Minus Plus Minus Plus Mortality: 0.25% 0.25% 0.25% 0.25% infla- Minus one discount discount inflation rate tion rate year age rate rate rating % % % % % % %
Discount rate 1.80% / 2.50% 2.30% 2.05% 2.55% 2.30% 2.30% 2.30% Rate of RPI assumption 2.70% / 3.10% 2.40% 2.40% 2.40% 2.15% 2.65% 2.40% Rate of CPI assumption 1.90% / 2.10% 1.90% 1.90% 1.90% 1.65% 2.15% 1.90% Rate of salary increase 2.90% / 3.10% 1.90% 1.90% 1.90% 1.65% 2.15% 1.90%
110 111 Financial Statements 07
7.5 17. Operating Lease Commitments 7.5 Notes to the SLC had commitments under non-cancellable operating leases for land and Notes to the buildings as set out below. There were no other non-cancellable operating Financial Statements leases. Financial Statements
2020 2019 Restated Statement As previously Grant-in-Aid Disposal of Prop- Restated 2019 £’000 £’000 reported 2019 adjustment erty, Plant and of Financial Position Equipment and Within one year 120 3,925 31 March 2019 Intangible Assets In the second to fifth years inclusive - 11,511 £’000 £’000 £’000 £’000 In over five years - 174 Non-current assets 120 15,610 Property, plant and equipment 16,151 - (53) 16,098 Intangible assets 94,734 - (3) 94,731 The operating leases in respect of land and buildings are guaranteed by the Secretary of State for Education. Total non-current assets 110,885 - (56) 110,829 The comparative figures for the year ended 31 March 2019 represented operating leases for premises in Bothwell Street and Argyle Street, Glasgow, Hillington and Darlington. These premises have now been incorporated within Current assets note 9 for the year ended 31 March 2020 as ‘right of use assets’ in accordance with IFRS 16. Trade and other receivables 13,992 (7,196) - 6,796 Contingent rent payable in the year ended 31 March 2020 totalled £nil (31 March 2019: £nil). No contingent rent is payable on any future financial commitments as at 31 March 2020. Cash and cash equivalents 17,305 - - 17,305 There are no restrictions imposed by any of the above financial commitments. Corporation tax 2 - - 2 At 31 March 2020 SLC had placed contracts for the purchase of non-current assets to the nearest £1,000 totalling Total current assets 31,299 (7,196) - 24,103 £1,026,000 (31 March 2019: £688,000) and intangible assets totalling £1,220,000 (31 March 2019: £822,000). Total assets 142,184 (7,196) (56) 134,932 18. Called up share capital Current liabilities 2020 2019 Trade and other payables (70,036) 39,203 - (30,833) £ £ Provisions (1,024) - - (1,024) Authorised: Corporation tax - - - - 200 ordinary shares of 50p each 100 100 Total current liabilities (71,060) 39,203 - (31,857) Allotted, called up and fully paid:
20 ordinary shares of 50p each 10 10 Total assets less current liabilities 71,124 32,007 (56) 103,075
19. Prior Year Comparatives Restatement Non-current liabilities Prior year comparatives have been restated upon SLC’s reassessment of the accounting policy for the Grant-in-Aid Trade and other payables (71,681) 71,681 - - received from the sponsoring department. Provisions (5,035) - - (5,035) In prior years, Grant-in-Aid was recorded on an accruals basis within revenue. Following the reassessment of accounting policy, Grant-in-Aid drawn down from the DfE is recorded on a cash basis in line with DfE’s own reporting Retirement benefit obligation (31,138) - - (31,138) requirements and in line with the FReM. Grant-in-Aid is now credited to SLC’s reserves. Total non-current liabilities (107,854) 71,681 - (36,173) Funding received from the funding bodies in prior years for the purpose of the acquisition of property, plant and equipment and intangible assets was credited to the deferred capital receipts account and released to the SOCNE by Net liabilities (36,730) 103,688 (56) 66,902 amounts equal to the associated depreciation and amortisation charge.
Due to the changes in revenue recognition and associated treatment of both revenue and capital Grant-in-Aid, this Capital and reserves deferred funding has been released to the Statement of Changes in Taxpayers’ Equity. Called up share capital - - - At 31 March 2020, SLC undertook a review of Property, Plant and Equipment and Intangible Assets with nil net book value to identify all assets which had been disposed of. It was confirmed that these assets had not been in use since General reserve (36,730) 103,688 (56) 66,902 1 April 2018. Disposals were adjusted retrospectively for computer equipment, furniture fixture and fittings Total equity (36,730) 103,688 (56) 66,902 and licences.
112 113 Financial Statements 07
7.5 Notes to the 7.5 Notes to the Financial Statements Financial Statements
Restated Statement As previously Grant-in-Aid Disposal of Restated 2018 Restated Statement of As previously Grant-in-Aid Disposal of Restated 2019 reported 2018 adjustment Property, Plant reported 2019 adjustment Property, Plant of Financial Position 31 and Equipment Comprehensive Net Expenditure and Equipment March 2018 and Intangible 31 March 2019 and Assets Intangible £’000 £’000 £’000 £’000 Assets Non-current assets £’000 £’000 £’000 £’000 Property, plant and equipment 16,490 (348) 16,142 Revenue 190,017 (188,997) - 1,020 Intangible assets 91,628 (124) 91,504 Total non-current assets 108,118 - (472) 107,646 Expenditure:
Staff costs (98,849) - - (98,849) Current assets Restructuring costs (84) - - (84) Trade and other receivables 13,081 (4,445) - 8,636 Depreciation, amortisation and impairments (34,664) - 416 (34,248) Cash and cash equivalents 12,450 - - 12,450 Deferred capital receipts 34,664 (34,664) - - Corporation tax 1 - - 1 Other administrative expenses (90,578) - - (90,578) Total current assets 25,532 (4,445) - 21,087 (189,511) (34,664) 416 (223,759)
Total assets 133,650 (4,445) (472) 128,733 Operating profit 506 (223,661) 416 (222,739) Current liabilities Trade and other payables (65,673) 40,610 - (25,063) Finance income 14 - - 14 Provisions (201) - - (201) Finance costs (1,100) - - (1,100) Corporation tax - - - - Net financing expense (1,086) - - (1,086) Total current liabilities (65,874) 40,610 - (25,264)
(Loss)/profit on ordinary activities before taxation (580) (223,661) 416 (223,825) Total assets less current liabilities 67,776 36,165 (472) 103,469
Tax on result of ordinary activities 1 - - 1 Non-current liabilities (Loss)/profit on ordinary activities after taxation (579) (223,661) 416 (223,824) Trade and other payables (67,508) 67,508 - -
Provisions (5,281) - - (5,281) Retirement benefit obligation (23,227) - - (23,227) Other comprehensive (expenditure)/income: Actuarial (loss)/gain on defined benefit pension Total non-current liabilities (96,016) 67,508 - (28,508) (8,943) - - (8,943) scheme Total comprehensive net (expenditure)/income Net liabilities (28,240) 103,673 (472) 74,961 (9,522) (223,661) 416 (232,767) for the period
Capital and reserves Called up share capital - - - General reserve (28,240) 103,673 (472) 74,961
Total equity (28,240) 103,673 (472) 74,961
114 115 Financial Statements 07
7.5 20. Controlling Parties her husband was a member of 22. Statement of Loans 7.5 SLC is owned by the Secretary the UK Parliament, and sat on the Administered by SLC Notes to the Treasury Select Committee. She Notes to the of State for Education, the Welsh Funding for the purpose of making Financial Statements Ministers, the Scottish Ministers stepped down from her position at Financial Statements SLC and subsequently became the loans to students is received by SLC and the Minister for the Economy in from the Department for Education, Northern Ireland. Conservative MP for Dover at the 2019 general election. DfE is SLC’s the Welsh Government, the Scottish sponsoring body. Government and the Department for 21. Related Party the Economy in Northern Ireland. Transactions • Ms Mary Curnock Cook OBE is a Council Member of the Open As at 31 March 2020 the total SLC is a NDPB that is funded by University. face value of the loan portfolio the bodies detailed in note 1. Those administered by SLC on behalf of • Ms Charlotte Moar is a Council funding bodies are regarded as the funding bodies was £156.5bn Member at the University of Bath. related parties. (31 March 2019: £136.7bn), which During the year, SLC had various SLC is exempt from the disclosure excludes all non-repayable student material transactions with the above requirements in relation to support. departments. The Grant-In-Aid transactions and outstanding funding received is detailed in notes balances, where not individually or 23. Events after the 2 and 3. collectively significant, with any of Reporting Period the above related parties as the UK Dependants of Directors, executive In September 2020 SLC announced Government has significant influence management and staff who are its decision to vacate one of its over UK universities. students are eligible to participate leased buildings, Europa, in line with in the student loans scheme on the In addition to the above related party its Strategic Workforce plan and same terms and conditions as are disclosure, a register of interests the 2020 Comprehensive Spending available to other students. During for Non-Executive and Executive Review covering financial years the period, certain Non-Executive Directors is held by SLC and is 2020-21 to 2024-25. and Executive Directors held the available upon request. following positions with higher Transactions with bodies in which education institutions which SLC the Non-Executive Directors held transacts with for student funding or interests during the year have been bodies which are closely associated examined and no related party with higher education. transactions have been found. • The outgoing Chair, Mr Christian Compensation for key management Brodie, did not hold any relevant personnel is disclosed in Section 4 roles during the period. Remuneration and Staff Report. • The Interim Chair, Prof. Andrew Wathey CBE is Vice Chancellor and Chief Executive Officer of Northumbria University and a Council Member of the All-Party University Group. • The new Chair appointed on 1 April 2020, Mr Peter Lauener, is Chair of the Newcastle College Group. • Ms Natalie Elphicke was an independent member of the Audit and Risk Committee at DfE and
116 117 www.gov.uk/slc
100 Bothwell Street Glasgow G2 7JD Tel 0141 306 2000 Fax 0141 306 2005 VAT Reg No. 556 4352 32 Registered in England and Wales No. 2401034 Registered Office: Memphis Building Lingfield Point McMullen Road Darlington D1 1RW