The City and Guilds of London Institute Report and Financial Statements 2016/2017cover artwork.indd 108/02/2018 17:29:00cover artwork.indd 208/02/2018 17:29:02 The City and Guilds of London Institute Registered charity number: 312832 (England and Wales) SC039576 (Scotland) Royal charter number: RC000117 Report and consolidated financial statements for the year ended 31 August 2017 City & Guilds Group Report and Financial Statements 2016/2017 1 Contents Trustees’ Annual Report 2 Independent Auditors’ Report 19 Consolidated Statement of Financial Activities 21 Balance Sheets 22 Consolidated Statement of Cash Flows 23 Notes to the Financial Statements 24 The City and Guilds of London Institute Incorporated by Royal Charter Founded 1878 1 Giltspur Street London EC1A 9DD T 020 7294 2468 F 020 7294 2400 info@cityandguildsgroup.com www.cityandguildsgroup.com City & Guilds Group Report and Financial Statements 2016/2017 Trustees’ Annual Report ……………………………………………………………………………………………………………...……… 2 Trustees, Director General, Secretary and Adviser Trustees Principal Office Sir John Armitt CBE FREng FICE FCGI 1 Giltspur Street Chairman of Council London EC1A 9DD A J Johnston CFCIPD HonFCGI Vice-Chairman of Council Joint Honorary Secretary External Auditors resigned 22 November 2017 BDO LLP 2 City Place P R McKee ACMA HonFCGI Beehive Ring Road, Gatwick Treasurer West Sussex RH6 0PA Dr A G Limb CBE FCGI Joint Honorary Secretary Internal Auditors RSM K J Baughan 25 Farringdon Street appointed 26 October 2017 London EC4A 4AB A Brown appointed 26 October 2017 Investment Managers BlackRock Global Investors Ltd C V Fenton 12 Throgmorton Ave appointed 26 October 2017 London EC2N 2DL Dame Judith Hackitt DBE FCGI CCLA Investment Management Ltd resigned 23 March 2017 Senator House 85 Queen Victoria St Professor A Halstead FCGI London EC4V 4ET D J Illingworth FCA FCGI Principal Bankers A P Smyth The Royal Bank of Scotland London Corporate Centre, PO Box 412 Dr T F Strickland 62-63 Threadneedle Street London EC2R 8LA P Stringfellow MBE HonFCGI resigned 9 March 2017 Actuaries Secretary to the Institute Willis Towers Watson C D Miller 71 High Holborn London WC1V 6TP Group Chief Executive and Director General of the Institute C E Jones FInstLM Principal Legal Advisers Other Key Management Personnel Charles Russell LLP J T Conybeare-Cross ACA Chief Financial Officer 5 Fleet Place S Saxton Group Director, People & Organisation Development London EC4M 7RD P T Ellaway Group Strategy Director K Donnelly MBE Managing Director, City & Guilds Bird & Bird LLP M Johnson Managing Director, Kineo 12 New Fetter Lane J Yates Managing Director, ILM and New Ventures Director London EC4A 1JP City & Guilds Group Report and Financial Statements 2016/2017 Trustees’ Annual Report …………………………………………………………………………………………………………...……… 3 Introduction The trustees (“the Trustees”) of The City and Guilds of London Institute (“the Institute”) present their Annual Report and the Consolidated Financial Statements for the year ending 31 August 2017. In preparing them, the Trustees have complied with the relevant legislation and adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015) (“SORP 2015”). The Institute’s principal office is set out on page 2 of this Report, together with the names of the Trustees at the date on which this Report was approved, any other Trustees who served during the year ending 31 August 2017, the Director-General, the Secretary, the external and internal auditors, the investment advisers, the principal bankers, the actuaries, and the principal legal advisers. About us: pioneers in skills development since 1878 The Institute was founded in 1878 by the Corporation of the City of London and livery companies (the Guilds) to protect and promote the standard of technical education. The Institute was granted a Royal Charter by Queen Victoria on 26 October 1900. Its purposes and administration are regulated by the Royal Charter and the associated Supplemental Charters, Statutes, Ordinances and Standing Orders. It has retained its link with the Royal Family since 1881 when the Prince of Wales (who later became King Edward VII) became its first President. Today, the President of the Institute is Her Royal Highness The Princess Royal. The Institute was registered as a charity in England and Wales (312832) in 1965 and is now also registered as a charity in Scotland (SC039576). It is the founding organisation of the City & Guilds Group (‘the Group’) and its businesses, and the awarding body recognised by the UK qualifications regulators for City & Guilds and ILM qualifications. Objectives and activities: helping people, organisations and economies to grow Helping people achieve their potential through learning is core to what we do. Our purpose is the same today as it has always been: to help people, organisations and economies develop their skills for growth. Put simply, we develop skills that help people into a job, progress on the job, and move into the next job. Our heritage makes us uniquely positioned to understand the future of work and learning. We have always worked closely with industry and adapted to changing technical, social and economic trends to anticipate and fill skills gaps. The outcome is more confident, mobile and work-ready candidates, more capable and inspiring leaders, more productive workforces and successful economies. Our growing business portfolio The Group’s longest-established business is City & Guilds. City & Guilds provides vocational qualifications, learning resources, assessment and accreditation to colleges and training providers to equip people with the skills to drive business and economic growth across 26 industries. One of City & Guilds’ key learning programmes is apprenticeships. Apprenticeships combine on-the-job experience with elearning to make sure apprentices gain the skills needed to progress in their careers. Taking part in these programmes helps organisations build a more qualified and better-trained workforce with the right skills for the job. City & Guilds offers the widest choice in the UK with over 135 frameworks available. Our apprenticeships are seen as the benchmark in key industries – from agriculture to engineering, management to hairdressing. The City & Guilds Group businesses also include ILM, Kineo, The Oxford Group, Digitalme and Gen2. Our businesses currently operate in Europe, the Americas, Africa, Middle East, Asia, and the Pacific. Together, our group of businesses set the standards for work-based and corporate learning, on-the-job development, and skills recognition around the world. We make skills and careers portable. We know our products work; from vocational qualifications, learning resources and assessments through elearning and learning technologies, to accreditation and training delivery. We continue to expand the range of our products through acquisitions. We also invest in exciting new ventures that support the future of skills development. City & Guilds Group Report and Financial Statements 2016/2017 Trustees’ Annual Report …………………………………………………………………………………………………………...……… 4 How we deliver value As the market leaders in skills education and leadership and management qualifications, we deliver value for our customers by being a single supplier for elearning, training support services, accreditation, and skills credentialing services. We provide a broad and imaginative range of products and services: Kineo offers award winning elearning that 95% of clients have rated as “excellent” or “very good” and is also consistently ranked as a top 20 service provider by trainingindustry.com and elearningindustry.com. The Totara Learning Management System (a Kineo investment) is used by more than 8.5 million learners worldwide. City & Guilds is the internationally recognised standard for vocational qualifications. It is estimated that since 2000 over 20 million qualifications have been awarded. ILM offers management qualifications and apprenticeships which focus on developing practical leadership skills through a combination of on-the-job and theory-based training. The Oxford Group offers leadership training and coaching that delivers measurable business results for clients through a global network of leadership training consultants and in 28 languages. Digitalme offers digital credentialing services including open badges for young people to share their skills in a digital world. The Digitalme Credly platform is the leading credential management software that empowers the enablers of skills development to take control of framing, capturing and communicating the skills needed by employers. Gen2 offers specialist training and engineering (STEM) apprenticeships in the Cumbria region. We also conduct international research and offer expert opinion on global skills development issues such as the future of work and learning, skilled labour mobility and productivity. Who we work with Governments: to provide vocational education systems that meet regional skills needs and ultimately lead to growing economies. Colleges and independent learning providers: to provide centre support and consultancy services that lead to cost savings and increased efficiencies. Employers: to provide training, validation of candidates’ skills, effective corporate learning, and accreditation of learning and development programmes that lead to more productive workforces and increased efficiencies. Senior executives: to provide leadership training and coaching that lead to more capable and inspiring managers and measurable business results. Individual learners: to provide industry-recognised, market leading qualifications and credentials that lead to more confident and work-ready candidates. Our people / working with us Across the Group, our people make us who we are. They range from employees to the Trustee and Management Boards, the Council, and Fellows of the Institute. All of our people are motivated by our shared purpose and ambition to lead skills development around the world and are committed to our core values – leadership, imagination and integrity – which inspire everything we do. They guide the way we work, our products and services, and how we act each and every day. We value equality, diversity and inclusion in our employees, and we have positive plans in place to further improve in these areas as an organisation. This year, we launched an equality, diversity and inclusion programme that includes improving data and benchmarking by making changes to our recruitment strategy, raising awareness in the organisation and communicating our progress to employees. We also published our first gender pay gap report on our website - well ahead of the 4 April 2018 government deadline. We have worked to lessen the barriers in our recruitment process by removing the requirement for applicants to have qualifications, and are signed up to the Armed Forces Covenant to support members of the Armed Forces community. We have also set up a working group to review our current recruitment and employment processes and policies to see what we do well, what we can do better, and how we compare to other organisations. We provide a wide range of personal development tools including the same programmes we offer to our customers including the Totara elearning platform and Filtered courses. We offer a huge library of elective elearning topics and all employees must also regularly take anti-bribery training as part of a zero-tolerance policy towards bribery and corruption. We also take a zero-tolerance approach toward modern slavery, which applies to all people working for the Group in any capacity, as well as our suppliers. This year we were proud to provide 69 work experience placements across our businesses which helps young people to City & Guilds Group Report and Financial Statements 2016/2017 Trustees’ Annual Report …………………………………………………………………………………………………………...……… 5 transition into the world of work by placing them in a real working environment. We also hosted 112 young people on work experience open days helping young people to understand what employers look for in young people. Through our Apprentice Connect programme, which sends current and former apprentices into schools, colleges and careers events to inspire young people who may have not yet considered an apprenticeship as a career pathway, we have reached almost 24,000 young people and trained 160 new Apprenticeship Ambassadors. Achievements and performance: making money to make a difference We reinvest any surplus our businesses make into the future of learning and skills development by broadening and evolving the Group offer through strategic complementary acquisitions, investing in exciting new ventures, products and services, and funding sustainable charitable initiatives. Our objectives this year were: broadening and evolving through acquisitions to provide the best possible experience for our customers investing in exciting new ventures and in products and services to expand our offer funding sustainable charitable initiatives to make a positive impact on global skills development investing in research to inform the future of work and learning to help shape skills education and training around the world. Expanding and evolving through acquisitions This year we acquired e3Learning, which helps us further bolster the Group’s position in the Pacific and allows us to offer high quality elearning and compliance training to employers. E3Learning is a leader in online workforce management and elearning based in Australia. They support more than 600 global clients via ready-to-deploy courses and bespoke solutions. We also welcomed Gen2 to the Group which allows us to offer technical training to our customers. Gen2 is based in Cumbria and works in partnership with engineering companies and is the largest training provider to the UK civil nuclear industry. It offers learning solutions, nuclear solutions and apprenticeships. New ventures, products and services that create more productive workforces New Ventures We invest in order to accelerate the growth of innovative education and training by supporting the businesses of entrepreneurs who are committed to innovative skills development. We provide funding in return for an equity stake in the business and recipients also benefit from our expertise and resources to help get their ideas off the ground. This year our New Venture Fund recipients included EmpowerTheUser and HT2 Labs: EmpowerTheUser was founded in 2010 and has offices in Dublin and New York. It partners with global organisations, such as Morgan Stanley, PwC and BNY Mellon, to deliver simulations for training and assessing workplace skills and behaviours. EmpowerTheUser’s multi-award-winning platform enables organisations to drastically reduce the costs of delivering immersive, job-relevant and data-driven learning and assessment experiences. HT2 Labs is a research and development company for workplace digital learning. Working alongside businesses and educational institutions such as Xerox, InterContinental Hotels Group and City & Guilds, HT2 Labs’ research has led to the development of new products that help make learning more personal, more social and more measurable. Their products include Learning Locker, Red Panda and Curatr. Investment in products & services We invest in new products and services and to improve existing products and services to constantly increase the quality of our offer to customers. This year we invested in the following product developments: content and product updates across all of our businesses assessment performance analytics to manage assessment data and records for customers more efficiently workflow tools to support End Point Assessment Kineo’s Managed Learning Service Pivot rebuilt to support expanded Apprenticeship delivery. Charitable skills development initiatives Everything we do as a group of businesses – from the way we work, to our products and services, to our charitable investments – seeks to make a difference to individuals and communities across the world. One of the ways we invest the City & Guilds Group Report and Financial Statements 2016/2017 Trustees’ Annual Report …………………………………………………………………………………………………………...……… 6 money our businesses make is through our charitable initiatives that maximise long-term social benefit through skills development. Skills Development Fund The Skills Development Fund is an investment in charitable initiatives, to support people in acquiring the skills they need to get into a job, develop on the job or move onto the next job. The Fund, set up with an initial investment of £5m, uses a proactive commissioning grant making model to identify highly strategic and long term projects, aligning to the main themes of the Fund: Women & Girls and Preventing Offending & Reoffending. The first grants were made in the year ended 31 August 2016. Investments so far include: St Giles Trust, one of the leading charities focused on rehabilitation and the prevention of offending AfriKids, whose mission is to protect and promote children’s rights in one of the most deprived areas of Ghana The Change Foundation, a UK-based youth charity that uses sport and dance to change the lives of disadvantaged people who are at risk from social exclusion Global Generation, a London-based charity aiming to grow ecological understanding and entrepreneurialism as a foundation for creating a positive future The Manipal Foundation, for its ‘The Virtual Classroom’ project which provides children in rural India with access to high-quality urban teachers Near East Foundation UK, for their employability and enterprise curriculum and network of Master Trainers in Jordan An Cosán, for their Virtual Community College in rural Ireland. This year we looked at redefining the grant making framework and strategy of the Fund and, as we had always intended, started to measure the impact of the funded programmes in order to truly assess the beneficial impact of the grants. The Fund will continue to support charities to implement projects which further our Group purpose – helping people, organisations and economies to develop their skills for growth - by offering long term grants of over £50,000. Other community investment and youth engagement programmes Each year we invest in discretionary charitable initiatives, including work experience and bursary programmes. Through our bursary programme, we supported 70 learners to complete a qualification and provided a further £132,000 to support more learners through our partnerships with livery companies. We estimate that we have awarded over £2 million and supported over 1000 people since the bursary programme began in 1999. We were proud to support the following two initiatives in London to help the local community around our head office: London Youth’s Quality Mark scheme was developed with and accredited by the City & Guilds business and is the only quality assurance scheme for youth organisations that involves young people in the assessment. It provides youth organisations with a badge of excellence that they can show to local authorities, funders and young people to prove they are doing the most they can to transform lives. So far 92 youth centres have received the quality mark across 25 London boroughs. The House of St Barnabas’ Employment Programme aims, through a 12-week Employment Academy, to break the cycle of homelessness by providing training, work experience and employment opportunities to help people rebuild their lives. In addition to investing in our communities, we are also working to lessen the impact we have on the environment in the areas where we operate. We are committed to energy efficiency in our offices to minimise our impact on the environment, and our suppliers need to abide by a strict code of conduct including offering a sustainable wage to contractors and not allowing modern slavery in any part of the supply chain. A Sustainable Procurement Working Group develops guidance on best practices when choosing suppliers across the Group, to make sure that social enterprises, SMEs, minority-owned and eco-friendly businesses are considered in addition to large established suppliers. Building a community of excellence We are uniquely positioned to bring together communities who share our mindset as to the importance of work-related learning. These range from our Fellows, Trustees and Members through to livery companies and other skills related organisations as well as both nominees for and recipients of our awards. Next >