Annual Report - University of Brighton · University of Brighton, are taking time to adjust. The...

Annual Report 2018–19

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 CONTENTS

CONTENTS

Introduction from the Chair of Governors 1

Introduction from the Vice-Chancellor 2

Financial Review 3

Public Benefit Statement 7

Environmental Sustainability 10

Strategy:

University Strategy 2016-21 12

Putting Students at the Heart of Everything we do 14

Making a Difference Through Research and Enterprise 16

Enabling our Staff and Liberating Talent 19

A Great Place to Work and Learn 21

Investing in Our Future 23

Risk Management 25

Corporate Governance 27

Remuneration Report 30

Independent Auditor’s Report 35

Statement of Principal Accounting Policies 37

Consolidated Statement of Comprehensive Income and Expenditure

41

Consolidated Balance Sheet 42

Consolidated Statement of Reserves 43

Consolidated Cash Flow Statement 44

Notes to the Financial Statements 45

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 INTRODUCTION

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INTRODUCTION FROM THE

CHAIR OF GOVERNORS

Mark Burch Chair of the Board of Governors

his report comes at a time when the University of Brighton, along with the wider

sector, continues to face a range of external challenges. The demographic decline in the number of 18-year-olds is well known and this, combined with the removal of the cap on undergraduate numbers has created a highly competitive student recruitment landscape to which all universities, including the University of Brighton, are taking time to adjust. The future higher education funding landscape also remains in a period of flux, with the continued fall in the real value of the current undergraduate student fee and increased pension costs creating ongoing challenges. In this context, while it is disappointing to report that we had an accounting deficit in 2018-19 of £7.6m, it is important to note that we generated £6.2m of free cash flow after repayment of loan principal and interest, and were able to support investment for the future. The Board of Governors remains focused on ensuring that the University takes a prudent approach to managing its finances in the short to medium term with a view to strengthening its long-term financial sustainability. During 2018-19, the University took significant steps to invest in its long-term future, particularly in the area of student accommodation, with the approval of a major building programme at our Moulsecoomb

Campus as part of a broader redevelopment of the area. A total of 800 new student rooms will open in September 2021 with affordability for students central to the funding model. In addition, we have started work on a new academic building which is also scheduled to open in 2021 and will deliver a modern campus facility for our students and provide a new home for the Brighton Business School. Our efforts are not solely focused on the refurbishment and upgrading of our physical environment. The tremendous efforts of our staff resulted in a substantial improvement in our NSS scores, which rose by 3.6% for overall satisfaction. This reflected a wide programme of work by staff in academic and student support areas. And despite the ongoing challenges around resources, we continue to invest in staff development, student services, support for mental health and graduate employability. We also continue to strengthen our research and enterprise activities as we prepare for REF 2021. The next phase of the University’s development will be guided by the extension of the planning period covered by our strategy, Practical Wisdom, which will now run to 2024-25. The ongoing leadership of the Vice-Chancellor, Professor Debra Humphris, and her senior team is at the heart of our plans and the continued excellence of our work

with students would be not be possible without the diligent and enthusiastic work of the University’s entire staff team, to whom the Board is deeply indebted. In August I had the opportunity to meet some of the winners of the Governors’ Prizes awarded to ten outstanding graduating students who had shown the greatest improvement in their academic attainment. Meeting those students and their families was a very powerful reminder of the true value of our mission at the University of Brighton, which is to create life changing opportunities for our students.

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UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 INTRODUCTION

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INTRODUCTION FROM THE

VICE-CHANCELLOR

Professor Debra Humphris Vice-Chancellor

espite the challenging environment over the past year the University has

continued to make very good progress in delivering against its strategic priorities. The major capital investment in our Moulsecoomb campus is delivering a transformation that will benefit our students and staff for years to come. We have continued to improve the learning and teaching spaces across all of our campuses and to invest in new systems to underpin the continuing delivery of high-quality teaching and to enhance the student experience. We have continued to invest in the development of our staff and in our commitments to equality and diversity and sustainability whilst further improving the effectiveness and efficiency of many of our operations. And we continued with the roll-out of a curriculum review across all of our courses to ensure that they reflect current best practice and provide students with flexibility in module choices and assessment methods. The impact of all of this was reflected in the significant improvement seen in the overall

satisfaction of our students as measured by the National Student Survey carried out earlier this year. Over the year we celebrated the many award-winning successes of our incredibly talented students and recent graduates across a range of fields including fashion, art, engineering, journalism, architecture, town planning and geology. We also saw a number of notable achievements in our research and enterprise expanding knowledge in areas as diverse as low-emission engine technology, maximising the effectiveness of cancer treatments, the environmental impact of micro-plastics, understanding ageing, and building resilience amongst young people facing adversity. And we

continued to build our global profile including by becoming the first international member of the Research Canada partnership. Our successful higher and degree apprenticeships programme continued to grow to meet demand in business and management, construction and the built environment, health and science and teaching. The teacher training delivered by our School of Education in early years, primary and secondary was all rated as outstanding by Ofsted. All this combined means that our University remains an attractive and distinctive destination for students and staff who want to be part of a diverse, creative and inspiring learning community.

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UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 FINANCIAL REVIEW

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FINANCIAL

REVIEW

he sector wide impact of the government’s decision to hold regulated tuition fees for full-

time undergraduates at £9,250, combined with student recruitment at the University being lower than planned, resulted in income falling by 1.8% in 2018-19. Despite this challenge, the underlying operational performance of the University remained broadly in line with 2017-18. In common with much of the sector, our key financial sustainability metric is adjusted EBITDA (earnings before interest, tax, depreciation and

amortisation, further adjusted to remove the impact of the FRS 102 pension adjustments – see Note 21 to the accounts). We use this as it is a robust measure of the underlying cash generating performance of the University; the headline financial result is not always a good indicator of underlying performance due to the impact of non-cash adjustments, such as the FRS 102 pension adjustments. Adjusted EBITDA fell by £3.3m in 2018-19, to

£17.8m (8.4% of total income), although this fall relates to the cost impact of a voluntary severance scheme run in 2019, the timing of which results in savings from the scheme being realised in 2019-20 and future years.

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FINANCIAL RESULT The University reported a financial deficit of £7.6m in 2018-19, a reduction of £12.1m from the £4.5m surplus in 2017-18. This reduction can be explained by 3 main factors: • Valuation loss on investment

properties of £2.8m (2017-18: £3.4m gain).

• Increase in the USS pension deficit provision of £2.7m (2017-18: £0.2m reduction). Refer to the Pensions section below for further detail.

• Restructuring costs of £3.8m, with costs not being offset by in-year savings due to the costs being incurred at the end

of the financial year, meaning savings will commence in 2019-20 (2017-18: £2.6m cost of restructuring, but offset by savings in-year).

INCOME Total income in 2018-19 was £211.5m, a reduction of 1.8% from £215.3m. Breakdown as follows:

Academic fees from full-time home and EU students fell by 5.7% in 2018-19, reflecting both a shortfall against the targeted level of recruitment and against the actual level recruited to in recent years. The recruitment performance was highly variable across academic schools, reflecting patterns of subject demand seen at sector level. The University only chose to apply the 2017-18 increase in regulated tuition fees from £9,000 to £9,250 to new starters, so we have not yet seen the full impact of this increase across the regulated fee student population. Postgraduate fee income saw no change year on year. Fee income from international students increased by 6%, a combination of

an increase in student numbers and inflationary increases in fee levels. Funding body grants increased by 6%, mainly through increases in the National Collaborative Outreach Programme (NCOP).

Research grant income fell by 8%, with most of this reduction coming from the level of Research Council grant funding.


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EXPENDITURE Total expenditure in 2018-19 was £216.3m, an increase of 1.2% on 2017-18. Both years are inflated by the impact of the FRS 102 pension adjustments required for the LGPS and USS schemes (see Note 23 to the accounts for more detail). Excluding these adjustments, the underlying level of total expenditure fell by 0.3%, reflecting the careful management of costs in response to the year on year decline in income. Included within the underlying total expenditure for 2018-19 are restructuring costs totalling £3.8m, most of which relate to a voluntary severance scheme (VSS) run across the University, with most staff exiting under the scheme leaving in July 2019. This therefore represents

an in-year cost, with the savings impact to be reflected in 2019-20 and future years. This contrasts with the VSS held in 2017-18, which saw most staff leave towards the start of the financial year, so the cost was significantly offset by in-year savings. Underlying staff costs (excluding the FRS 102 pension adjustments) increased by 1.5% to £126.4m. The general pay increase for the year

was 2.0% and a significant proportion of staff also received incremental pay increases (up to 3.0%) as they moved up a spinal point within their pay grade. The overall increase was held to 1.5% through the impact of tighter controls over recruitment and specific savings made in response to the fall in tuition fee income. The underlying staff cost to income ratio (excluding FRS 102 pension adjustments) increased from 57.8% in 2017-18 to 59.8% in 2018-19, although the fall in income is a key driver of this increase. The University monitors this ratio closely, although direct comparison with other institutions is difficult due to the distorting impact of outsourcing. The University does not outsource any of its core activities.

PENSIONS The FRS 102 pension adjustments for the Local Government Pension Scheme (LGPS) and Universities Superannuation Scheme (USS) are a source of considerable volatility in the financial results of the University. Although we do not have a significant exposure to the USS, due to most academic staff being enrolled in the Teachers’ Pension Scheme (TPS), we still, as required by FRS 102, make a balance sheet provision for the discounted future obligation to make deficit recovery payments. As outlined in Notes 17 and 23 to the accounts, the deficit recovery plan following the 2017

actuarial valuation of USS, combined with a fall in discount rates, has resulted in a £2.7m (180%) increase in the USS deficit provision. Notes 23 and 24 highlight the fact that, post year-end, the 2018 actuarial valuation for USS has been finalised, which would, had it been in place at year-end, have reduced the final provision by £1.7m. OTHER ITEMS Incorporated within the results is the University’s share of the Brighton & Sussex Medical School (BSMS) joint venture (see Note 22 to the accounts for further details). The University’s share of the BSMS

result for 2018-19 was a deficit of £0.6m (2017-18: surplus of £0.2m). The year end valuation of investment properties resulted in a £2.8m unrealised loss (2017-18: £3.4m gain). The value of the site generating this loss is impacted by a number of planning complexities. GOING CONCERN The Board of Governors confirms that it has reasonable expectation that the University has adequate resources to continue in operation for the foreseeable future. For this reason, it continues to adopt the going concern basis for preparing the financial statements.


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BALANCE SHEET Capital additions in 2018-19 were £22.6m (2017-18: £9.4m), with most of this spend relating to The Big Build project on our Moulsecoomb Campus in Brighton. The student accommodation element of the project is being funded via a Design-Build-Finance-Operate (DBFO) contract, which limits the level of capital investment required by the University. At 31 July 2019, the University held controlled cash and short-term deposits of £61.2m (2018: £68.8m). The total cash and deposit position shown in the accounts of £70.8m includes the University’s share of the BSMS joint venture cash (£9.6m, see Note 22 to the accounts), which is managed by the University of Sussex.

The fall in the cash position was expected due to the ongoing impact of The Big Build. The cash impact of the capital spend was partly offset by the sale of one of the main buildings at our Hastings Campus for £8.5m (reflected in the accounts as a sale of investment property). The University adopts a risk averse approach to managing cash, choosing to place money in short-term deposits with banks and building societies which we consider secure based on external

benchmarks. Funds are not invested in riskier assets such as bonds or equities. Deposits are regularly reviewed to assess any changes in risk or interest return.

OUTLOOK In common with the rest of the sector, the University faces a number of financial challenges in the short-term. These include: • Ongoing freezing of regulated

tuition fees, which amount to almost two-thirds of the University’s income;

• A demographic dip in the number of university-age UK students, combined with intense competition for student recruitment across the sector;

• Cost inflation, in particular staff costs, with the employer’s contribution rate for the Teachers’ Pension Scheme (TPS) increasing in September 2019 from 16.48% to 23.68% (a £3m annual impact for the University).

• Uncertainty around the future tuition fee regime and the impact of Brexit.

The University has been addressing these risks by progressing opportunities to grow our income, for example through the expansion of degree apprenticeships, and carefully managing our cost base to reflect the fall in the student population currently being experienced. Student recruitment targets have been reduced and current indications are that 2019 student recruitment will be on target. Alongside this, the University is making a significant level of investment in infrastructure, which is anticipated to generate growth in student recruitment when the new student residences and the other aspects of The Big Build programme are complete for the start of the 2020-21 academic year. Refer to page 21 for further detail.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 PUBLIC BENEFIT STATEMENT

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PUBLIC BENEFIT

STATEMENT

he University of Brighton is a Higher Education Corporation and, as such, is an exempt

charity regulated by The Office for Students (OfS). The principal objectives of the University, in accordance with the Education Reform Act 1988, are concerned with the provision of higher education and the conduct of research. Supporting this, the University also undertakes other activities, which include knowledge exchange, consultancy and the provision of accommodation, catering, conference and sport services. The Board of Governors of the University are its trustees and the Board is collectively responsible for the supervision of the University and its practices. In developing and overseeing the University’s strategy and activities, the Governors have given careful consideration to the Charity Commission’s guidance, and the specific guidance provided by OfS, on public benefit. The Board is also aware that the University must make provision to those from lower income backgrounds to have the opportunity to benefit from the services provided. The University’s immediate beneficiaries are our students undertaking higher education study. Beneficiaries of our teaching and research-related activities are diverse and include local, national and international organisations,

community groups and the populations of the wider City of Brighton and Hove and the Sussex region. Of particular relevance to public benefit is our commitment to widening participation, engagement with the community and the positive impact, through our research, on environmental sustainability and a healthy society. IMPROVING ACCESS AND INCREASING ASPIRATIONS WITHIN EDUCATION The University has a long standing and well evidenced commitment to widening participation and fair access. We believe that education is for everyone and we endeavour to enable our students to realise their potential, flourish as individuals in their time with us and go on to make a positive contribution in their chosen field. Central to the University’s strategy is our aim to put students at the heart of everything we do, including the following commitments, which directly inform the focus and scope of our Access Participation Plan (APP) across the student lifecycle: • To develop accessible

programmes of learning that enable a wide range of people of all ages to realise their

potential and develop their future employability;

• To strengthen our partnerships with schools, academies trusts and further education colleges to enable access and support progression to higher education;

• To meet the needs of learners with diverse entry requirements who wish to enter higher education, using our wider participation plan to support all of our students to progress and succeed;

• To celebrate and promote the diversity of our student body, ensuring our students are supported and enabled to succeed by continuing to enhance services that support their success and wellbeing;

• To support our students towards their destinations of choice.

During 2018-19 the University spent a total of £10.2 million on supporting fair access to and success in higher education through our APP. These funds were used to provide bursaries and financial support for students from less well-off backgrounds and those in financial difficulties, and on activities relating to outreach. Alongside this, the University contributed over £1m in funding for other scholarships and student support schemes.

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WIDENING PARTICIPATION The University is committed to widening participation. Our outreach work continues to forge strong links with schools and colleges with low university progression rates and within areas with significant indices of deprivation across Sussex and the South East. We also focus interventions across the student lifecycle on groups of students under-represented in higher education, with specific widening participation targets for state schools, disabled students, looked after children, care leavers, and those living in low participation neighbourhoods. The University has committed to the Stand Alone Pledge. We support estranged students through targeted bursaries, as well as making financial support more widely accessible to a wide range of students.

Across all these activities, the importance of sustained interactions rather than one-off interventions remains fundamental, as does embedding widening participation into the fabric of the University and ensuring that we support those learners through all stages of their student journey. REGIONAL PARTNERSHIPS The University began supporting school academies in 2008, as part of our commitment to improving educational opportunities. The University is the sole sponsor of the University of Brighton Academies Trust, a network of 15 infant, primary and secondary schools in Sussex, responsible for the education of approximately 7,600 pupils. The Trust was praised by Ofsted following an evaluation in June 2019. 14 of the 15 schools are now judged to be good or outstanding. The University regards school and college sponsorship as a

cornerstone of our strategy to raising attainment, improving progression and increasing participation in higher education for the most disadvantaged. The University recognises that there is much to be gained from sharing best practice with colleagues across the sector, and we are active members of a number of groups, including: • Southern Widening

Participation Network. • Sussex Learning Network. • Higher Education Access

Tracker national steering and operational research groups.

• National Education Opportunities Network.

The University is also the lead partner in Sussex for the National Collaborative Outreach Programme (NCOP). This multi-million pound programme aims to increase the numbers of young people aged 14-19 years in Sussex accessing higher level learning by 2020.

The University is the sole sponsor of the University of Brighton Academies Trust.


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APPROACH TO FUNDRAISING The University undertakes a range of fundraising activities to secure philanthropic funds to support the life and work of the University today. Funds are raised from a variety of sources, including alumni, friends of the University, corporate organisations and charitable trusts and foundations. The University received £0.5m in philanthropic donations during 2018-19. Our fundraising activities are conducted through a variety of channels: face-to-face solicitations, direct marketing, crowdfunding, telephone fundraising and bid writing. The University does not use external professional fundraisers or

commercial agents to undertake fundraising activities. In addition to the permanent staff within our Philanthropy and Alumni Engagement department, a group of current students are recruited and trained as fundraisers for our telephone campaigns. These students are paid an hourly rate and do not work on commission. The University is a registered member of the Fundraising Regulator and adheres to the guidance provided in the Code of Fundraising Practice. The University has established a Gift Oversight Group to oversee the acceptance, administration and allocation of all philanthropic donations received, including associated due diligence work.

RESEARCH AND ENTERPRISE REACH AND IMPACT The University’s researchers make significant contributions of international standing to social, cultural, economic and environmental wellbeing across a broad range of work, from the arts, humanities and social sciences to the physical and life sciences, technology and engineering. The University’s research and enterprise partners are drawn from its local area and region, the UK and around the world. Further information about the University’s research activity can be found on pages 16-19.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 ENVIRONMENTAL SUSTAINABILITY

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ENVIRONMENTAL SUSTAINABILITY

ustainability is one of the University’s four core values and as such informs how we

do things. Environmental sustainability is embedded into decision making across all areas of the University; our commitment runs throughout all our practices, from the management of the University’s campuses and facilities, through procurement, travel, food, ethical investment, community engagement, research, teaching and learning. The University has a dedicated team with responsibility for implementing the sustainability action plan, and also has a wider role in creating positive environmental impacts that have regional, national and international benefits through our research, teaching and collaborations with business and industry. The University has been ranked 25th in the People & Planet University League 2019 out of 154 universities and higher educational institutions in the UK, in recognition of our commitment to, and progress towards, sustainability. CLEAN GROWTH UK This is a great illustration of how universities can take a key role in leading the sustainability drive in local communities. Clean Growth UK utilises funding from Research England to catalyse clean and green innovation through access to university expertise and facilities,

commercialisation and investment readiness support. Led by the University’s Green Growth Platform, and in partnership with Liverpool John Moores University and the University of Portsmouth’s Greentech South, it brings together three successful green business innovation hubs, which help businesses develop clean and green products, services and processes. The Green Growth Platform was launched by the University in 2014 and has to date helped small businesses raise over £2m in R&D funding, creating over 300 green economy jobs and has helped to

develop over 70 new products and services. This activity is complemented by Responsible Futures, one of the core strands of the University’s research strategy, which is focused on exploring opportunities to create more just and environmentally sustainable societies. CARBON REDUCTION The University is committed to carbon reduction and continues to reduce its carbon footprint year on year, despite increasing operating hours across a growing estate.

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Photovoltaic array on the roof of the Cockcroft building, Brighton, generates approximately 34,000kWh of electricity a year, saving 18 tonnes of carbon.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 ENVIRONMENTAL SUSTAINABILITY

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Since 2011, through a combination of actions, the University has delivered a 37% reduction in carbon emissions. The intention is to go much further than this; as part of upcoming discussions on a refresh of the University’s strategic priorities our intention is to develop a credible and evidence-based plan to shift to net-zero carbon emissions by 2050. Reductions in carbon emissions are being achieved through a range of projects, including installing solar panels, rolling out energy efficient lighting and updating old heating and ventilation systems with more efficient versions. For over 5 years, the University has been purchasing 100% renewable electricity. The solar capacity was increased in 2018-19 with the installation of a 60kW solar PV on our Grand Parade building in the centre of Brighton and a 30kW solar PV on the roof of the new parking facility on the Moulsecoomb Campus in Brighton. These new arrays are expected to generate nearly 100,000kWh of electricity every year, and reduce the University’s carbon footprint by over 25 tonnes CO2 a year. The generated electricity from the solar arrays at Moulsecoomb will be used to power over 50 electric vehicle charging points in the University’s new parking facility, which also contains storage for over 250 bikes. The University’s Sustainability Team work closely with new build projects across the University, ensuring that sustainability is at the forefront of the building design, and that carbon reduction opportunities are maximised. As a minimum level, we ensure our newest buildings are built to at least BREEAM excellent standards. RECYCLING AND WASTE MANAGEMENT The University works to promote a zero waste culture of ‘rethink, reduce, reuse and recycle’, to significantly reduce waste and increase recycling across all areas of the University estate. Overall recycling rates are currently 54%, with further improvements targeted in future years. All food waste from University restaurants is collected

for anaerobic digestion (Defra’s preferred route for food waste), where it is broken down into biogas, used to generate electricity, and fertiliser. STUDENT AND STAFF ENGAGEMENT The University understands that to reduce carbon emissions and environmental impact, we need to engage with our students and staff to encourage them to adopt sustainable behaviours. Our award-winning sustainability engagement campaign, c-change, engages staff, students and members of the community in driving forward progress towards a fully

sustainable university. A range of c-change events are run throughout the year, including Green Week, Travel Week and Bike Week, halls recycling competition, Reuse Project, the Big Xmas Switch-Off and the c-change pledge-a-thon. As well as reducing our impact on the environment, we also aim to empower our graduates to leave the University with the skills and knowledge needed to be change-makers for a sustainable future. As well as reducing our impact on the environment, we also aim to empower our graduates to leave the University with the skills and knowledge needed to be change-makers for a sustainable future.

c-change campaign activities.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 STRATEGIC REVIEW

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UNIVERSITY STRATEGY 2016-2021

he University of Brighton was founded on the basis of becoming a multidisciplinary

institution, enabling us to work across academic disciplines to address the complex challenges faced by individuals, communities and societies. The University has a dedicated, diverse and passionate community of students, staff and alumni, and we take pride in making a significant impact in our local community and reaching out globally, based on our strong commitment to partnership working.

The Strategic Review (pages 12-24) provides an overview of the University’s 2016-21 Strategy, Practical Wisdom, and outlines the progress made in 2018-19 against the five strategic themes. VISION The University of Brighton exists for the public benefit to realise potential and shape futures through high-quality, practice-based learning, teaching, research and enterprise.

Our vision is to become the university of choice for people who want to live and learn in a unique city setting as part of a dynamic, diverse and creative community that embraces partnership working and wants to make a positive difference to society. This vision, together with the rest of the strategy, was developed with the involvement of the whole University community as well as input from our external partners.

VALUES The strategy outlines the University’s core values that inform and underpin everything we do:

Inclusivity

We champion and nurture inclusivity, diversity and equality to the highest levels, recognising the value it has to the future of our students, staff, partners and community.

Sustainability

We recognize and value the critical importance sustainability has for the future of our students, staff, partners and community. Whether it’s through buildings of the future, a strong and protected financial position or the long-lasting knowledge and support we give our students and staff – sustainability will be highly valued, underpinning the decisions we make and the activities we do, now and in the future.

Creativity We’re committed to creating new, radical and exciting opportunities for our students, staff and community. We recognise the scale of the challenges we face as an institution, society and world and place value on tackling these in creative and innovative ways.

Partnership Through partnership we create distinctive educational programmes, we share and disseminate our research and enterprise and we create mutual benefit to our city, our region and globally. They are critical to our success as an institution.

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STRATEGIC THEMES Underpinning the strategy are 5 key themes, crucial for successful implementation of the strategy. The following sections outline the progress that has been made on each theme in 2018-19. Putting Students at the Heart of Everything we do

Working in partnership with our students to deliver a high-quality experience and ensure they flourish during their time with us.

See pages 14-15

Making a Difference Through Research & Enterprise

Establish an integrated research and enterprise offer, strategically focused on research excellence, and raise the quality, volume, reach and impact of our research.

See pages 16-18

Enabling our Staff and Liberating Talent

Working together to streamline our processes and systems. Actively engaging staff in the leadership and delivery of the strategy.

See pages 19-20

A Great Place to Work and Learn

Grow capacity for student residential accommodation and consolidate and improve our campuses and facilities in Brighton and Eastbourne.

See pages 21-22

Investing in Our Future A sustainable financial plan that ensures we can continue to make strategic investments in order to achieve our ambitions.

See pages 23-24

OUTLOOK Since Practical Wisdom was first launched in 2016, there have been a number of significant changes to the external landscape in which the University operates, alongside the ongoing uncertainty around crucial areas such as, for example, Brexit

and the future fee regime for higher education. We therefore see this as an appropriate time to review our priorities under the five strategic themes outlined above, extending out the strategy period to 2025. There is no change to the University’s vision, values and

strategic themes through this review; the review is about re-framing our priorities for the extended strategy period, being clear on how progress will be measured, communicating this to our staff and asking for their input as to how they can contribute to the priorities.


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PUTTING STUDENTS AT THE HEART OF EVERYTHING WE DO

ur approach to education and the student experience is about enabling our students

to develop the practical wisdom needed to achieve their career goals and the confidence and capacity to make a positive difference. The student experience is underpinned by our core values of inclusivity, sustainability, creativity and partnership. STUDENT EXPERIENCE

The University saw a 3.6% increase in our overall satisfaction rating in the 2019 National Student Survey (NSS), one of the largest increases in the sector. Although an excellent performance, our satisfaction rating, at 80.3%, remains below sector average so this remains a core area of focus. The University’s Academic Health Panel assess the NSS results and review student outcomes (continuation and attainment) across each academic school and course. Schools are then directed to focus on areas where specific actions might be required. Action plans are closely monitored throughout the year in order to deliver improvements in the educational experience for all our students, alongside the actions that drive the strategic priorities outlined in this section. BAME DEGREE AWARDING GAP The University is committed to addressing the sector-wide

attainment gap among black, Asian and minority ethnic (BAME) students. In May 2019 the Vice-Chancellor signed the joint Universities UK (UUK) – National Union of Students (NUS) pledge to work with students and use the UUK-NUS BAME student attainment gap recommendations within the University. The University’s BAME Degree Awarding Gap Action Plan has been shaped through the outputs from BAME student experience focus groups, held with BAME students across all our academic schools. One successfully implemented action is the BAME Match Mentoring Programme, which provides an opportunity for BAME students to get support from a BAME mentor who has experience of living or working in the local community. Students are paired with a mentor for six months, meeting regularly to

have confidential discussions about relevant issues and to exchange ideas and information. ACCESS AND PARTICIPATION PLAN

The vision of the University’s Access and Participation Plan (APP) 2020/21 to 2024/25 is to ensure that the University is a wholly inclusive institution, where students succeed irrespective of background. We have identified six key target groups which we will support through the APP at particular stages of the lifecycle. The Plan includes detailed targets and milestones to close gaps between these target groups and their counterpart groups. In addition, we will continue our institutional commitment and mission to support care leavers, estranged students and commuter students.

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STUDENT POPULATION Total student numbers fell by 5.0% in 2018-19, with this decline coming from Home (UK) and EU students across both undergraduate and postgraduate provision. This is reflective of the impact of the demographic dip in the number of university-age UK students and the intense competition for student recruitment across the sector since the student number caps were lifted in 2015. EMPHASIS ON PSRB The University has a very strong professional and vocational focus, with 54 Professional, Statutory and Regulatory Bodies (PSRBs), recognising 212 courses that were

studied by around 10,800 of our students in 2018-19. Course design is informed through employer and practitioner engagement to ensure course content is fully up to date and relevant. With over half the University’s courses PSRB accredited, students are strongly

connected to professional real world practice, enhanced through many courses providing placement opportunities to allow students to gain work or practical experience.

OUTLOOK The re-framing of the University’s strategy has provided the opportunity to review and develop more focused key priority areas for education and student experience, through a process of consultation across the University community. The outcome of this is the four priority areas outlined here, each of which is underpinned by key enabling actions and success measures. These priorities sit alongside the institutional goal of diversifying our portfolio and student body through more flexible learning pathways, including online learning. Putting students at the heart of everything we do means ensuring an engaging, inclusive, challenging, practice-based learning experience for all our students. This will be supported through encouraging innovative approaches to learning and teaching, maximising the use of technology and research-teaching linkages.


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MAKING A DIFFERENCE THROUGH RESEARCH

AND ENTERPRISE

esearch and enterprise are interlinked and, together, they drive the University’s

contribution to the broader knowledge economy. We have a sector-leading reputation for delivering significant social, cultural and economic impact from our research, for the co-creation of distinctive research and educational programmes and for establishing partnerships that provide an enduring benefit to communities. The Research and Enterprise Strategic Plan was launched in 2017 and is based on the following principles: • We undertake high-quality

research and enterprise that is disseminated widely to build our local, regional, national and international reputation;

• Through partnerships, we engage in the co-production of research and enterprise that addresses strategically important questions, has the potential to generate impact and is of value to society;

• Research and enterprise underpin our teaching, and our students engage with our research and enterprise activities;

• We value the expertise of our staff and the contributions of

our students and support them in enhanching their research and enterprise skills;

• Our research and enterprise infrastructure and environment support sustainable activity and the achievement of our strategic goals;

• Our structures and decision-making processes are efficient, transparent and meet the highest standards of integrity and we are accountable for the return on investments made.

The activity arising from the Research and Enterprise Strategic Plan is channelled thematically through the five Brighton Futures (Connected Futures, Creative Futures, Healthy Futures, Radical Futures, Responsible Futures), underpinned by the work of the University’s Centres of Research and Enterprise Excellence. This structure holds an active and vibrant research community and 2018-19 was a very busy year as the countdown to the next Research Excellence Framework (REF) submission in November 2020 continues. A key area of focus was the submission of the University’s Code of Practice for the REF to Research England, which was accepted as submitted.

RESEARCH AND ENTERPRISE INITIATIVES The University awarded £2.5m to research and enterprise initiatives and doctoral research in 2018-19, including match funding for 12 research studentships. A total of 69 awards were made to research and enterprise projects across all disciplines and career stages. These awards support projects that augment our research and enterprise capacity and enhance our reach and reputation. They continue our commitment to develop our rich research and enterprise environment. In 2017 and 2018, the University’s Enterprise Team launched the first two rounds of Innovation Awards, which included funding for seed, proof of concept and continuity funding to support our most enterprising academics. This was designed to encourage and enable staff to take forward new ideas that drive innovative economic and social development, diversify routes to commercial outcomes and support the potential to generate value to society. Funding has supported a wide spectrum of activity, including the development of specialist consultancy and training, building and testing of prototypes, product design, market analysis and business plan development, creation of innovation space and an ideas factory.

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PROGRESS DURING THE PAST YEAR The University launched its new research management information system (Pure) early in the academic year and this has brought tremendous benefits to our profiling and connectivity. The system provides key institutional information, academic staff profiles and is crucial in connecting academics and research administrators with projects, outputs and each other. The University held its second Research and Enterprise Conference in July, bringing together researchers and enterprise experts from across the University. The event was an opportunity to hear from informative and inspirational speakers about the external environment and to reflect on developments in research and enterprise at the University two years on from the introduction of the Research and Enterprise Strategic Plan. The last REF in 2014 ranked the University 27 out of 128 institutions for our world-leading research impact. Over the past year there have been many examples of high profile research projects, which include the following: • With support from Bloodwise,

our researchers developed the first test to predict quickly and accurately how people will respond to standard treatment for the most common type of leukaemia. The technology could guide doctors’ decisions on which drugs to give to patients and thus become a ‘game changer’ in the treatment of chronic lymphocytic leukaemia. While previous versions of the test had taken a week to process, results can now be ready in a day.

• Through a Knowledge Transfer Partnership (KTP) with European Thermodynamics Limited (ETL), researchers from our Advanced Engineering Centre are applying groundbreaking heat

pipe research to optimise thermal management in a range of applications, including electric vehicles. The pulsating heat pipe system has previously been tested on parabolic flights to assess its suitability for space applications.

• Funded by the Arts and Humanities Research Council (AHRC), the ART/DATA/HEALTH project brings together cultural participation, data science and digital inclusion to explore health issues. Workshops with care professionals and service users allow artists and researchers to analyse data, and produce creative work to inform public health communication strategies. Meanwhile, the project will improve health literacy and digital skills among socioeconomically disadvantaged people to reduce health inequalities.

• As part of an international research study, we are working to protect Thailand’s coastal communities from natural disasters which cause the loss of 30 square kilometres of shoreline every year. The project is funded by the Natural Environment Research Council (NERC), Economic and Social Research Council (ESRC) and Thailand Research Fund and will improve understanding of Thailand’s vulnerability to storms, floods and coastal

erosion which affect more than 11 million people. Our physical geography research will help predict the effects of future expected climate change scenarios and help build resilience.

• We are leading the ambitious INNOVATEDIGNITY research project, aiming to provide sustainable, dignified care for older people in Europe. Funded by the European Union’s Horizon 2020 Research and Innovation Programme, experts in nursing will guide early stage researchers on placements with nationally-leading organisations in their investigations of new care models and digital applications. Findings will identify ways to support older people to live well and equip the next generation of thought leaders with vital research experience and transferable skills.

• Over the next three years, a research project will address the complex inter-relationship between the Troubles – the Northern Irish conflict which began in 1969 and ended in 1998 – and migrant experiences and memories in Great Britain. The AHRC-funded study will provide new insights into the ways in which ongoing conflicts between competing understandings of the past might be addressed and negotiated.

Researchers from our Advanced Engineering Centre testing the novel heat pipe system in zero gravity on a parabolic flight.


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OUTLOOK

The key research and enterprise priorities within the extension of the University’s strategy are outlined here, all underpinned by key enabling actions and success measures. Alongside these priorities is the immediate focus around preparations and delivery of our REF submission.


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ENABLING OUR STAFF AND LIBERATING TALENT

e aim to attract the very best staff and to support our people to achieve their

full potential regardless of background. STAFF Full time equivalent staff were 2,253 as at 31 July 2019, a reduction of 9 (0.4%) from the previous year. This excludes the impact of the voluntary severance scheme held in 2019, as most staff left under the scheme at the end of July. Staff are employed across a range of academic and professional service roles and their contributions to the organisation are recognised throughout this report. Since 2018 the University has adopted the Real Living Wage as the minimum wage level paid by the organisation. STAFF ENGAGEMENT The University ran its most recent staff survey in June 2018, with senior management committed to respond to feedback and take action as a result. This led to the formation of the Staff Survey Programme Oversight Group, represented by staff across the organisation, many of whom had taken part in focus groups to discuss the findings of the staff survey. This has resulted in actions that have made a real difference, with implementation across the whole University and more locally at academic school and departmental level.

Among the actions implemented during the year were: • The relaunch of the Staff

Development Review process in January, with a focus on creating dedicated time and space for staff to talk about their development.

• A job shadowing scheme which enables staff to think about how shadowing someone from another part of the University can aid their development, as well as building connections and knowledge across the University.

• The running of the Professional Services Staff Conference in June, with around 150 staff attending the programme of events focused on highlighting development opportunities and giving the chance to meet

colleagues and to share experiences and knowledge.

• The continued expansion of the University’s staff mentoring scheme.

• The introduction of a University-wide development day, allowing all teams across the University to have a day of dedicated development activities.

• The continuous leadership development programme, providing an ongoing programme of events for the University’s wider leadership team, consisting of around 140 senior staff across the organisation.

• The raising of awareness of the wide range of wellbeing activities and initiatives available to staff across the University, coordinated through new staff intranet pages.

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Professional Services Staff Conference, June 2019


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EQUALITY AND DIVERSITY The University is committed to the principles of equality, diversity and inclusion. We value the different contributions and experiences of all who make up our community, promoting mutual respect and understanding as well as freedom of thought and expression. This year we celebrated being named as one of the top employers for LGBT+ people in the UK in the Stonewall Top 100, ranking 72nd in the 2019 Stonewall Workplace Equality Index. As part of the ongoing LGBT+ equality work at the University, an LGBT+ allies* initiative was launched in 2018 and there are now 40 trained LGBT+ allies across the University. This scheme was developed in partnership with the LGBT+ Staff Network Group, which works hard to raise awareness of LGBT+ issues and the visibility of LGBT+ staff at the University, and is enabling change to policy and practice through the Stonewall Steering Group. *an LGBT+ Ally is someone who does not identify as lesbian, gay, bisexual or transgender themselves, but who wants to support their LGBT+ colleagues and students.

This year also saw staff and students turn out for the Disability Pride Festival, Trans Pride and the Brighton Pride Community Parade, with over 60 students and staff attending the latter, wearing t-shirts designed by the winner of a student competition. In addition to the Stonewall Top 100 ranking, the University holds an Athena Swan Bronze award, recognising our commitment to gender equality, and we are a Race

Equality Charter member and a Disability Confident employer. OUTLOOK The key strategic priorities coming out of the re-framing of the University’s strategy are to ensure that our people have the skills they need to succeed and to ensure that the University is a healthy, inclusive workplace where people are engaged and well at work.

Staff and Students at the Brighton Pride Community Parade, 2019.


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A GREAT PLACE TO WORK AND LEARN

he University recognises the importance to student and staff experience of continually

improving or maintaining the quality and functionality of our estate and wider infrastructure through investing in new build, maintenance, refurbishment and withdrawing from, or finding alternative uses for, space that is no longer fit for purpose. Whilst The Big Build has been the main area of focus, due to its transformational impact, there have been other significant areas of investment and development across the whole University. THE BIG BUILD The transformation of our Moulsecoomb campus in Brighton, named The Big Build by our students, is underway and represents one of the biggest

projects ever undertaken by the University. The project consists of:

• Five new halls of residence

with rooms for 800 students at affordable rents.

• A new academic building with flexible modern learning and social spaces.

• A new Students’ Union with social spaces and a food and beverage offer.

• New fitness facilities.

• A new multi-storey car park to replace existing parking facilities.

• A new pedestrian bridge bringing both sides of the Moulsecoomb campus together.

The Big Build is part of a wider masterplan for the City of Brighton & Hove that includes the neighbouring Preston Barracks site, the development of which is already significantly progressed and which will include new homes, including affordable housing, student accommodation, an innovation hub for start-ups and SME businesses, cafes, shops and social spaces. The Big Build is due for completion in 2021. Ahead of this, we are fully focused on maintaining the student and staff experience during the continuing construction phase. Alongside this, we have been working with our partners on the project, including the constructors and architects, to offer work placements, specialist lectures, case studies and skills sessions for our students.

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WIDER INVESTMENT Alongside The Big Build, other developments of the University estate continue. In 2018-19 these included: The completion of the re-modelling of the Edward Street building in the centre of Brighton, to provide significantly improved facilities for the School of Media and to facilitate the relocation of media subject areas to the Grand Parade Campus. Investment continues in the University’s Teaching and Learning Spaces Modernisation Programme. This is a multi-year project to deliver state-of-the-art technology and equipment for teaching and learning spaces across all campuses. Parts of the Eastbourne campus were transformed following the delivery of a new student social learning space and new flexible seminar room, both in the Queenwood building, and the

creation of a state-of-the-art teaching and research gym facility from what was an old underused hall. The gym has been created in the form of a high performance training centre to allow us to teach our students the knowledge and skills required to go out and work in elite sport and rehabilitation settings. The refurbishment of the Checkland building atrium on our Falmer campus in Brighton. The new atrium has been underpinned by sustainable design principles and a collaborative partnership across the University to deliver on the key functional requirements identified at the start of the project.

OUTLOOK The key strategic priorities within this theme are to:

• Deliver The Big Build.

• Align the estates strategy with the academic strategy.

• Deliver a more efficient and better quality estate.

• Make the University’s activities net-zero carbon by 2050.

Checkland building atrium refurbishment, Falmer Campus, Brighton.


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INVESTING IN OUR FUTURE

n the challenging financial environment currently faced by the sector, it is essential that we

continue to manage our financial affairs prudently in order to generate the appropriate level of cash resources to maintain our activities and to invest to deliver our strategic priorities. In seeking to achieve these aims, we have instigated a range of coordinated programmes that are aimed at seeking opportunities to grow and diversify our income

generation, as well as review our operating models and organisational structures to ensure these continue to meet the needs of the University in an efficient and effective manner. INVESTMENT Together with the significant investments being made across the University that have been outlined in other sections of this report, we continue to invest in other strategically important areas linked

to our student and staff experience. For example, in 2018-19 we commenced investment in a new curriculum management system and a new identify and access management system. For 2019-20 we will implement a module evaluation system and an attendance monitoring system. Both of these are key to ensuring that our courses remain relevant to our students’ needs and that we provide support when most needed.

STRUCTURAL REVIEW The University has launched a programme of structural review across some key areas, to ensure we are operating and delivering our core activities and operations effectively to meet the needs of our students and staff. The reviews are in progress, and include the size

and shape of academic schools, academic administration, information technology provision and delivery, and estates and facilities management. CAPITAL PROGRAMME The University is around halfway through delivery of our current capital programme, with over £50m

of planned investment to complete the programme, which is centred around The Big Build project, as detailed earlier in the Strategic Review. As part of the overall strategy for the University’s estate, there is a review and disposal programme for assets that are no longer required for delivery of our core activities.

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The 210° Igloo projection system is used to research reaction times and decision-making in sport-related situations.


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DIVERSIFYING AND GROWING INCOME The University is focused on exploring viable options for expanding the range of our current activities, ensuring that these remain fully aligned to our key public benefit objectives of advancing education, learning and research. The University has expanded its provision of higher and degree apprenticeships. These were launched by the government in 2015 to allow apprentices to achieve a full bachelor’s or master’s degree whilst training on the job. The University is an approved apprenticeship training provider, rated as ‘good’ by Ofsted in its recent inspection. In 2018-19 the University had 6 live apprenticeship programmes, delivering teaching to over 200 apprentices, primarily in the health services area (nursing associates and assistant practitioners). These are expected to double in 2019-20. The University sees a range of opportunities to increase our

postgraduate education activity. A review of our postgraduate portfolio is focusing on the current and future needs of employers and the broader economy, as well as supporting the career development and enrichment of prospective students. The University continues to expand its global influence by taking steps

to increase recruitment of international students. Building on our successful partnership with Kaplan, through the establishment of the University of Brighton International College, we are investing in further collaborations in key countries to ensure that we are an attractive destination for prospective students.

Local MPs Maria Caulfield and Peter Kyle on a visit to the University to meet Nursing Associate apprentices and their employers.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 RISK MANAGEMENT

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RISK MANAGEMENT

s with all organisations, the University of Brighton faces a significant and diverse range

of risks that could impact on our ability to deliver our mission and strategy. Effective risk management is key to ensuring that the University achieves its strategic objectives. This section outlines the University’s approach to risk management and highlights some of the material risks we currently face, together with mitigating actions we have taken. Identifying, understanding and mitigating our key risks is crucial to

the effective operation of the University. Responsibility for risk sits at all levels of the organisation; schools and departments are responsible for identifying and monitoring their own specific risks, overseen by the Risk Management Steering Group (RMSG), which has responsibility for coordinating the risk management processes. The RMSG reports key risks through to the Audit Committee and the Board of Governors quarterly, and the University Executive Board on a monthly basis.

It is not possible to entirely eliminate all risks and the University’s approach is to identify and assess risks and determine what steps can reasonably be taken to mitigate their potential impact. The management of our most important risks involves an assessment of the likelihood of occurrence and potential consequences, with risks aligned to the key priorities within the University’s Strategy. The RMSG monitors the rolling list of current and emerging risks. Included within the key risks currently facing the University are the following:

Risk Description of risk How we seek to mitigate

STUDENT EXPERIENCE

There is a risk that the University does not provide the level of experience and support required by our students, both in terms of their education and their broader experience of student life, and the support they need to find suitable future employment when leaving the University. Failure to meet these expectations will impact on the individual students and may also result in issues for the University’s brand and future ability to recruit students.

There are a number of key systems and processes in place to monitor this risk that utilise student feedback and consultation, with continuous review programmes in place alongside the National Student Survey and local surveys. These all provide key information to shape improvements and plans in this core area of the University’s strategy.

FINANCIAL SUSTAINABILITY

The market for student recruitment has become increasingly competitive in recent years, combined with the financial squeeze arising from frozen regulated tuition fees and underlying cost inflation. Alongside this, there are potential risks from Brexit to the recruitment of international students and staff.

The University has a comprehensive financial forecasting process. This operates in conjunction with senior management oversight of the financial challenges and opportunities faced by the University, and the strategic actions necessary to ensure ongoing financial sustainability.

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UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 RISK MANAGEMENT

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Risk Description of risk How we seek to mitigate

EMPLOYEE ENGAGEMENT

The success of the University is dependent on our ability to attract and retain talented and engaged individuals. The University’s most recent staff survey (June 2018) identified staff development, employee wellbeing and strategy & leadership as key areas for focus.

Enabling our staff is a key theme within the University’s strategy. The Staff Survey Programme Oversight Group was established in September 2018, drawn from staff across the organisation, to work on the key themes identified in the staff survey.

QUALITY OF FACILITIES

Managing a large estate across multiple campuses presents a number of challenges to ensure that buildings continue to be optimally utilised and maintained to a high standard. Alongside this, there is a risk associated with estates projects in terms of the impact of disruption for students, staff and the wider public.

The University is currently investing significantly in the Moulsecoomb campus to deliver new student accommodation, an academic building and other key facilities. Estate planning and investment is a core part of the University’s strategy, and is closely managed to ensure that investment is appropriately targeted and projects are effectively delivered, with the level of disruption carefully monitored.

EXTERNAL ENVIRONMENT

The environment in which the University operates is complex and subject to a high level of change and uncertainty. Changes in regulatory supervision, lack of clarity over the future tuition fee regime and uncertainty over Brexit are all examples of live challenges facing the sector.

The University closely monitors the position of the UK government and other external bodies to ensure we are well prepared to respond to policy changes and other external events. Where possible, senior staff seek to influence policy direction through membership of relevant organisations such as, for example, the University Alliance, and by directly lobbying with policy makers.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 CORPORATE GOVERNANCE

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CORPORATE GOVERNANCE

he University of Brighton is committed to exhibiting best practice in all aspects of

corporate governance. This section provides an overview of the governance of the University. The University endeavours to conduct its business in accordance with, and with due regard to, the principles identified by the Committee on Standards in Public Life and with the guidance to universities from the Committee of University Chairs. The University is a higher education corporation established in accordance with the Education Reform Act 1988, amended by the Further and Higher Education Act 1992, which also sets out its powers. The University’s Articles of Government set out the requirements and responsibilities of the Board of Governors. MEMBERSHIP OF THE BOARD OF GOVERNORS The Board of Governors is the supreme governing body of the University. A statement of the Board’s primary responsibilities is provided on page 28. The Board draws its authority from the University’s Articles of Government. The majority of Governors are external to the University, and the Board also includes student and staff members, together with the Vice-Chancellor and the President of the Students’ Union. The role of Chair of the Board is separate from the role of the University’s Chief Executive (Vice-Chancellor).

Members of the Board of Governors during 2018-19 were: Independent members Mr M Burch (Chair) Ms J Walker (Deputy Chair) Mr M Allsop Mr T Beattie Mr J Cronkshaw Dr A Feggetter Mr J Gill Mr A Grainger Mr R Malik (until 2-8-2018) Dr A Masterson Ms J Minor Mr P Robb Employees of the University Mr A Baser Ms J Fowlie (until 9-9-2018) Dr P Hearsum Professor D Humphris Dr R Kuisma (from 21-11-2018) Professor E Ostler Student representatives Mr T Ibukun Mr S Shew BOARD AND COMMITTEE MEETINGS The Board of Governors meets at least four times a year and has several committees. Much of the detailed work is routed through committees of the Board. The following five committees are formally constituted with terms of reference and are chaired by an independent member of the Board (with the exception of the University Executive Board, which is chaired by the Vice-Chancellor). They all report regularly to the main Board.

FINANCE & INFRASTRUCTURE COMMITTEE Considers and recommends to the Board the financial strategy for the University and advises on investment decisions, annual revenue and capital budgets and reviews and approves the financial statements. It has responsibility to make recommendations to the Board of Governors on the development and redevelopment of the University’s estate and on the financial implications of such development. It does not have any decision-making powers. It meets at least four times a year. AUDIT COMMITTEE This Committee meets four times a year, with the University’s external and internal auditors in attendance. The Committee considers detailed reports from both sets of auditors, together with recommendations for the improvement of the University’s systems of internal control and management’s responses and implementation plans. It also receives and considers reports from the Office for Students as they affect the University’s business, monitors adherence to the regulatory requirements and monitors the management of risk within the University. The Committee has the authority to call for any information from University officers, from internal and external auditors and from others whom it considers necessary to consult in order to discharge its responsibilities.

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NOMINATIONS COMMITTEE Makes recommendations to the Board in respect of the appointment of lay members of the Board and the offices of Chair and Vice-Chair of the Board. The objective of the Committee is to appoint high-calibre individuals with specific skills that are of value to the University. REMUNERATION COMMITTEE Considers the remuneration and terms and conditions of senior members of staff. UNIVERSITY EXECUTIVE BOARD (UEB) The UEB is the senior leadership and executive decision-making group of the University, with responsibility for developing, reviewing and implementing the University’s strategy and making recommendations on the strategy to the Board. This is undertaken through regular monitoring of the Higher Education policy environment, approval and review of key University projects, and monitoring of the University’s financial performance and key performance indicators, which are then reviewed by the Board. The UEB receives reports setting out key performance and risk indicators and considers possible control issues brought to its attention by early warning mechanisms which are embedded within the operational units and reinforced by risk awareness training. The UEB is chaired by the Vice-Chancellor, who is accountable to the Board for the organisation, direction and management of the University. The Vice-Chancellor is supported and advised by the other members of the UEB. During the year to 31 July 2019, the UEB consisted of the: • Vice-Chancellor • Deputy Vice-Chancellor • Director of Campus Development • Director of Finance • Director of People • Pro-Vice-Chancellor (Education &

Student Experience) • Pro-Vice-Chancellor (Research &

Enterprise) • Registrar and Secretary

BOARD OF GOVERNORS’ REMUNERATION The Governors receive no remuneration from the University in respect of activities undertaken whilst acting as a Governor, but are paid expenses for travel and subsistence in relation to duties undertaken as a consequence of Board membership. The University maintains a Register of Interests of members of the Board of Governors and of senior officers, which may be consulted by arrangement with the Clerk to the Board of Governors. PRIMARY RESPONSIBILITIES OF THE BOARD OF GOVERNORS The Board is the supreme governing body of the University, subject to the provisions of the University’s Articles. The primary responsibilities of the Board, as outlined in the Articles, are: • to determine the educational

character, mission, and strategic vision of the University and for oversight of its activities;

• to ensure that processes are in place to monitor the effective and efficient use of the resources of the University against approved plans;

• to ensure the solvency of the University and to have overall responsibility for the safeguarding of its assets, property and estate;

• to approve the annual budget and financial statements of the University and to ensure that proper books of account are kept;

• the appointment, grading, suspension, dismissal and determination of the pay and conditions of service of the holders of senior posts;

• setting a framework for the pay and conditions of all other staff; and

• having due regard within its decisions to the need to eliminate unlawful discrimination, advance equality of opportunity, and foster good relations between different people, in accordance with the Equality Act (2010).

RESPONSIBILITIES OF THE BOARD IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS The Board of Governors are responsible for preparing the Annual Report and the financial statements in accordance with the requirements of the Office for Students’ terms and conditions of funding for higher education institutions and Research England’s terms and conditions of Research England grant and applicable law and regulations. The Board are required to prepare group and parent University financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. The terms and conditions of funding further require the financial statements to be prepared in accordance with the 2015 Statement of Recommended Practice – Accounting for Further and Higher Education, in accordance with the requirements of the Accounts Direction issued by the Office for Students. The Board are required to prepare financial statements which give a true and fair view of the state of affairs of the group and parent University and of their income and expenditure, gains and losses and changes in reserves for that period. In preparing each of the group and parent University financial statements, the Board of Governors are required to: • select suitable accounting policies

and apply them consistently; • make judgements and estimates

that are reasonable and prudent; • state whether applicable UK

accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• assess the group and parent University’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and


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• use the going concern basis ofaccounting unless they eitherintend to liquidate the group or theparent University or to ceaseoperations, or to have no realisticalternative but to do so.

The Board is responsible for keeping proper accounts and proper records in relation to the accounts. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

The Board is also responsible for ensuring that:

• funds from whatever sourceadministered by the Group or theUniversity for specific purposeshave been properly applied tothose purposes and managed inaccordance with relevantlegislation;

• funds provided by the Office forStudents and Research Englandhave been applied in accordancewith the terms and conditionsattached to them;

• there are appropriate financialand management controls inplace to safeguard public fundsand funds from other sources;and

• secure the economical, efficientand effective management of theUniversity’s resources andexpenditure.

The Board is responsible for the maintenance and integrity of the corporate and financial information included on the University’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

STATEMENT ON INTERNAL CONTROL The Board of Governors is responsible for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while

safeguarding the public and other funds and assets for which it is responsible.

The University’s arrangements for the prevention and detection of fraud, bribery, corruption and other irregularities are designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives and can, therefore, only provide reasonable and not absolute assurance against material misstatement or loss.

The key elements of the University’s system of internal control, which is designed to discharge the responsibilities set out above, include the following:

• clear definitions of, and theauthority delegated to, heads ofacademic schools andprofessional services, and otherlevels of staff within theorganisation.

• a comprehensive medium- andshort-term planning process,supplemented by detailed annualincome, expenditure, capital andcash flow budgets.

• clearly defined and formalisedrequirements for approval andcontrol of expenditure.

• a comprehensive set of internalfinancial regulations, detailingfinancial controls and procedures,approved by the Board.

• Regular reviews of theperformance of each of theUniversity’s schools anddepartments, including monthlyreporting of financial results andanalysis of variances.

• an ongoing process of identifyingkey risks (whether business,financial, operational orcompliance) to the achievementof policies, aims and objectives, toevaluate the nature and extent ofthose risks, and to manage themefficiently and effectively.

• regular assessment of andreporting on, both to the Boardand Audit Committee,governance, risk managementand internal control, which mayinclude reports from managementon specific areas of concern andthe steps being taken to managethese risks/issues.

• risk management considerationsare addressed specifically on allmajor projects and decision-

making papers through the committee structure.

The University’s approach to internal control is risk based. There is an ongoing process based around:

• identification of key risks to theUniversity.

• assessment of the likelihood ofkey risks occurring and thepotential impact, both financialand non-financial.

• implementation of measures tomitigate key risks where possible.

• ongoing review of key risks duringthe year.

• regular risk and control reportingto Audit Committee, UEB and theBoard.

The Board is of the view that the University’s process for identifying, evaluating and managing its significant risks is embedded into ongoing operations and has been in place for the year ended 31 July 2019 and up to the date of the approval of the financial statements.

The system of internal control is regularly reviewed by the Audit Committee and Board, and accords with the internal control guidance for directors in the Combined Code as deemed appropriate for higher education. It is also informed by the University’s Internal Audit team. Senior management and Audit Committee have reviewed the performance of Internal Audit and are satisfied with it.

The Internal Audit plan is approved by the Audit Committee and endorsed by the Board. The senior management team and Audit Committee receive regular internal audit reports. These reports include recommendations for improvement, the implementation of which is tracked by Internal Audit and reported to Audit Committee.

Mark Burch Chair of the Board of Governors

Dated 27 November 2019

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 REMUNERATION REPORT

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REMUNERATION REPORT

his report provides an overview of the University’s approach to senior pay and contains audited information required in accordance with the Accounts Direction issued by the Office for Students (Direction OfS 2018.26). The report has also been compiled having regard to guidance from the Committee of University Chairs (CUC)

regarding pay policies and practices in British universities in relation to senior staff.

UNAUDITED INFORMATION

APPROACH TO SENIOR PAY The University’s approach to senior pay is detailed in its Senior Reward Policy, which lists its aims and objectives as being to: 1. Give confidence to the

University’s many stakeholders (including students, staff, regulators and taxpayers) that the Remuneration Committee is exercising its accountability for senior pay in a responsible and transparent way.

2. Ensure that individuals are paid fairly in a way that reflects relative accountabilities, job size and performance.

3. Ensure that the University fulfils its responsibilities in terms of Gender Pay Gap reporting and action planning for staff within its scope.

4. Offer rates of pay that enables the University to compete for, secure and retain high calibre and high performing leaders with the skills, knowledge, experience and attributes it needs.

5. Ensure that reward is proportionate to wider pay rates within the sector, and the

Institution, taking into account the need to demonstrate responsible investment of public monies.

The Senior Reward Policy sets the framework within which senior reward decisions are made, and marks the University’s intention to demonstrate transparency in reward practice in the sector. The Policy has been approved and adopted by the Board of Governors and underpins its written commitment to comply with the higher education remuneration code published by the CUC. REMUNERATION COMMITTEE Decisions regarding senior pay are determined on behalf of the Board by the Remuneration Committee, which comprises independent external members of the Board, who possess commercial and public sector pay knowledge and expertise. Objectives for the Vice-Chancellor are set annually by the Chair of the Board, and performance and progress against them is reported to and assessed by the Remuneration Committee. Objectives for other senior post holders are set annually by line managers, including, in the

case of University Executive Board (UEB) members, by the Vice-Chancellor. The Vice-Chancellor is not a member of the Remuneration Committee but is invited to attend sections of the meetings to report on performance and where the remuneration of other senior staff, including UEB, is considered. The Vice-Chancellor is not present at discussions regarding her own remuneration. TRADE UNION FACILITY TIME In accordance with the Trade Union (Facility Time Publication Requirements) Regulations 2017, public sector employers are required to report information on paid trade union facility time and the cost of this in relation to the total pay bill. For the period 1 April 2018 to 31 March 2019 the University paid 2.46 full-time equivalent trade union officials to carry out duties and activities. The total cost of paid facility time was £141,892, which is 0.12% of the total annual pay bill for the period. The percentage of paid time spent on trade union activities in relation to total facility time was 15%.

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GENDER PAY GAP In March 2019, the University submitted its second Gender Pay Gap report, which showed a mean gender pay gap of 13.01%, down from 14.06% the previous year, as outlined in the detail below. The University’s commitment to reducing the gender pay gap can be seen by work which has recently been undertaken and which we also have planned. This includes: • A change to the academic

promotions process, which now provides for applicants to

submit information regarding equality issues that might have impacted on outputs, to ensure these can be taken into account by the promotions panel.

• Introduction of a central mentoring scheme. 71% of individuals that have signed up to the scheme are women and we continue to promote this as an active way of supporting those women who are seeking career progression or support.

• More robust monitoring systems in the University’s

revised Staff Development Review scheme, to allow us to ensure that women are consistently receiving access to staff development opportunities or support, regardless of their role, career stage or discipline.

Following a staff survey undertaken in 2018, the University is concentrating on improving career development activities for professional services staff, the majority of whom are women.

*these figures represent a total of only 4 employees, all of whom hold University contracts but who provide services to external organisations which have the authority to determine bonus payments.


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EQUAL PAY During 2018 the University undertook an Equal Pay Audit for all staff covered by Grades 1-9. This allowed us to compare the pay of men and women doing equal work in the University in order to investigate the causes of any differences in pay and eliminate any that could not be justified. The Audit showed that much of the work undertaken over recent years to ensure fairness and transparency around processes such as initial salary assessments, promotion and equality in recruitment, are being clearly reflected in our equal pay situation. This is underpinned by a rigorous pay and grading structure

which supports everything we do to ensure work of equal value is paid equally. The most relevant findings from the Audit were that: • There was evidence that there

is no unexplained pay differential between men and women for employees recruited in the last 3 years.

• For longer serving employees the maximum extent of any unexplained gender pay difference was 0.8%.

• The share of women in the newest 25% of employees is

61.0%, which compares to 52.1% in the oldest 25%.

• There was no consistent and substantive evidence of unexplained pay difference across 3 equality groups (ethnicity, disability, and sexual orientation) regardless of when an employee joined the University.

• The probability of an employee receiving a promotion had no association with gender, ethnicity, or sexual orientation, although employees with a disability have a higher probability of being promoted than those without a disability.

AUDITED INFORMATION

VICE-CHANCELLOR’S REMUNERATION The Vice-Chancellor’s remuneration is reviewed annually by the Remuneration Committee. In assessing the Vice-Chancellor’s remuneration for 2018-19, the Committee received contextual data from the UCEA senior staff remuneration survey, including median pay from across the sector, which had also been analysed by mission group, regional locations and the size of the institutional budget. The Committee also received a summary report from the Deputy Chair of the Board of Governors on the Vice-Chancellor’s performance against target during the salary review period. The Vice-Chancellor’s salary for 2018-19 was determined according to a number of factors including, but not limited to: • the depth of the Vice-Chancellor’s

experience of leadership, management and academic experience within the higher education sector as well as the NHS;

• the breadth of leadership responsibilities for a large,

comprehensive and multi-campus university consisting of over 21,000 students and over 2,000 staff based at campuses across Brighton, Eastbourne and Hastings;

• the financial responsibilities for an institution with an annual turnover of £212m and which generates an estimated £700m for the regional economy;

• the accountability for sustaining a TEF Silver ranked educational experience for our students, and a significant research portfolio;

• the leadership of the University’s major capital development programme for the Moulsecoomb campus;

• ongoing influence on behalf of the University within the city of Brighton & Hove, across the wider local region and nationally across the HE sector via Universities UK and the University Alliance.

For 2018-19 the Committee agreed that the Vice-Chancellor should be granted a 1% pay award. The Committee also agreed that the Vice-Chancellor should receive a performance bonus of £12,500. However, since arriving at the University, the Vice-Chancellor has waived her contractual right to a performance bonus, instead these funds have been used by the University to support staff and student related activities.


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PAY RATIOS The Vice-Chancellor’s basic salary is 8.8 times the median basic salary of staff and the Vice-Chancellor’s total remuneration is 7.7 times the median total remuneration of staff (detail shown in table). The two ratios are calculated on a full-time equivalent basis and include all staff on regular contracts and all staff on atypical contracts of employment. The calculations exclude agency staff, so reflect all staff paid through the University’s payroll and included in real-time reporting to HMRC.

KEY MANAGEMENT PERSONNEL Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the University. We define key management personnel as the members of the University Executive Board (UEB). Refer to page 28 for further details. For the year ended 31 July 2019 the UEB consisted of 8 full-time members of staff (2018: 8), including the Vice-Chancellor. The total remuneration of UEB has declined in 2018-19 due to a period of role vacancy following the retirement of one member.

SEVERANCE PAYMENTS We pay due regard to the Guidance on Decisions Taken About Severance Payments in HEIs published by the Council of University Chairs (CUC).

The University paid £3.8m to 166 employees in compensation for loss of office in 2018-19 (2017-18: £2.6m to 121 employees). Included within the 2018-19 total are: payments totalling £3.2m made to 109 employees under a voluntary severance scheme, £0.3m of

payments made to 27 employees from the closure of the University’s campus in Hastings, and a number of employees on fixed term contracts of more than two years duration reaching the end of their assignments.


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HIGHER PAID EMPLOYEES The number of staff with a basic salary of over £100,000 per annum (including the Vice-Chancellor), broken down into bands of £5,000, is shown below.

* Note that the Medical Staff relate to staff employed in the Brighton & Sussex Medical School (BSMS), a joint venture arrangement between the universities of Brighton and Sussex (refer to Note 22 of the accounts). These staff all have employment contracts with the University of Sussex so are included above for information due to the joint venture nature of the arrangement. 50% of the cost of these staff is reflected in the University of Brighton’s financial results under the terms of the joint venture arrangement.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 INDEPENDENT AUDITOR’S REPORT

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INDEPENDENT AUDITOR’S REPORT

to the Board of Governors of the University of Brighton

OPINION We have audited the financial statements of the University of Brighton (“the University”) for the year ended 31 July 2019 which comprise the Consolidated Statement of Comprehensive Income and Expenditure, Consolidated and University Balance Sheet, Consolidated and University Statement of Changes in Reserves, Consolidated Cash Flow Statement and related notes, including the Statement of Accounting Policies.

In our opinion the financial statements:

• give a true and fair view of the state of the Group’s and the University’s affairs as at 31 July 2019, and of the Group’s and the University’s income and expenditure, gains and losses and changes in reserves, and of the Group’s cash flows, for the year then ended;

• have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and with the 2015 Statement of Recommended Practice – Accounting for Further and Higher Education; and

• meet the requirements of the Accounts Direction dated 19 June 2018 issued by the Office for Students and the early adopted requirements of the Accounts Direction for periods

beginning on or after 1 August 2019 issued by the Office for Students relating to disclosures about senior staff pay.

BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the group in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. THE IMPACT OF UNCERTAINTIES DUE TO THE UK EXITING THE EUROPEAN UNION ON OUR AUDIT Uncertainties related to the effects of Brexit are relevant to understanding our audit of the financial statements. All audits assess and challenge the reasonableness of estimates made by the directors, and related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and the Group’s future prospects and performance.

Brexit is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full

range of possible effects unknown. We applied a standardised firm-wide approach in response to that uncertainty when assessing the Group’s future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit. GOING CONCERN The Board of Governors has prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the University or to cease their operations, and as they have concluded that the Group and the University’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least a year from the date of approval of the financial statements. In our evaluation of the Board of Governors’ conclusions, we considered the inherent risks to the Group’s business model, including the impact of Brexit, and analysed how those risks might affect the Group and the University’s

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 INDEPENDENT AUDITOR’S REPORT

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financial resources or ability to continue operations over the going concern period. We have nothing to report in these respects.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the Group or the University will continue in operation.

OTHER INFORMATION

The Board of Governors is responsible for the other information, which comprises the Strategic Overview, Strategic Commentary, Risk Management, Public Benefit Statement, and the Report of the Governors and Corporate Governance Statement. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work, we have not identified material misstatements in the other information.

BOARD OF GOVERNORS RESPONSIBILITIES

As explained more fully in their statement set out on page 28, the

Board of Governors is responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the group and parent University’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless it either intends to liquidate the group or the parent University or to cease operations, or has no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

We are required to report on the following matters under the Office for Students and Research England Audit Codes of Practice issued under the Further and Higher Education Act 1992.

In our opinion, in all material respects:

• funds from whatever sourceadministered by the Group or theUniversity for specific purposeshave been properly applied tothose purposes and managed inaccordance with relevantlegislation;

• funds provided by the Office forStudents and Research Englandhave been applied in accordancewith the terms and conditionsattached to them.

THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR RESPONSIBILITIES

This report is made solely to the Board of Governors in accordance with 13(2) of the University’s Articles of Government and section 124B of the Education Reform Act 1988. Our audit work has been undertaken so that we might state to the Board of Governors those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the University and the Board of Governors for our audit work, for this report, or for the opinions we have formed.

Fleur Nieboer for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London E14 5GL

27 November 2019

http://www.frc.org.uk/auditorsresponsibilities

http://www.frc.org.uk/auditorsresponsibilities

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 JULY 2019

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STATEMENT OF PRINCIPAL

ACCOUNTING POLICIES

1. BASIS OF PREPARATION These financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education 2015 and in accordance with Financial Reporting Standards (FRS 102). The University is a public benefit entity and therefore has applied the relevant public benefit requirement of FRS 102. The financial statements are prepared in accordance with the historical cost convention (modified by the revaluation of fixed assets and derivative financial instruments). 2. BASIS OF CONSOLIDATION The consolidated financial statements consolidate the financial statements of the University and its subsidiary undertaking (Note 12) as well as the University’s share of the joint venture (a jointly controlled operation), the Brighton and Sussex Medical School (Note 22). The consolidated financial statements do not include the income and expenditure of the Students’ Union, as although the University exercises a measure of control over the Students’ Union this is not considered to be control as defined by FRS 102. The University sponsors the University of Brighton Academies Trust (UoBAT). Although the University has representation on the Trust's board, the Trustees and the Governors act for the Trust and not the University. The University does not gain direct benefits from the Trust’s activities and the funds of the UoBAT are restricted to its own charitable aims, which are not the

same as the University’s. The Trust’s funds would not, for example, be available to the creditors of the University in the event of the University’s insolvency. Furthermore, if the Trust were to fail the University would not receive its assets or reserves. For these reasons the accounts of the UoBAT are not consolidated into the University’s accounts. 3. INCOME RECOGNITION Tuition fee income is stated gross of any expenditure which is not a discount and credited to the Consolidated Statement of Income and Comprehensive Expenditure over the period in which students are studying. Where the amount of the tuition fee is reduced, by a discount for prompt payment, income receivable is shown net of the discount. Bursaries and scholarships are accounted for gross as expenditure and not deducted from income. Income from the sale of goods or services is credited to the Consolidated Statement of Comprehensive Income and Expenditure when the goods or services are supplied to the external customers or the terms of the contract have been satisfied. Investment income is credited to the Statement of Income and Expenditure on a receivable basis. Funds the University receives and disburses as paying agent on behalf of a funding body are excluded from the income and expenditure of the University where the University is exposed to minimal risk or enjoys

minimal economic benefit related to the transaction. GRANT FUNDING Government revenue grants including the Higher Education Funding Council for England (HEFCE), up to 1st April 2018, and, from 1st April 2018, the Office for Students (OfS) block grant and research grants are recognised in income over the periods in which the University recognises the related costs for which the grant is intended to compensate. Where part of a government grant is deferred it is recognised as deferred income within creditors and allocated between creditors due within one year and due after more than one year as appropriate. Grants (including research grants) from non-government sources are recognised in income when the University is entitled to the income and performance related conditions have been met. Income received in advance of performance related conditions being met is recognised as deferred income within creditors on the balance sheet and released to income as the conditions are met. DONATIONS AND ENDOWMENTS Non exchange transactions without performance related conditions are donations and endowments. Donations and endowments with donor imposed restrictions are recognised in income when the University is entitled to the funds. Income is retained within the restricted reserve until such time that it is utilised in line with such restrictions, at which point the income is released to general reserves through a reserve transfer.


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Donations with no restrictions are recognised in income when the University is entitled to the funds. Investment income and appreciation of endowments is recorded in income in the year in which it arises and as either restricted or unrestricted income in accordance with the terms or restriction applied to the individual endowment fund. There are four main types of donations and endowments identified within reserves: 1. Restricted donations - the donor has specified that the donation must be used for a particular objective. 2. Unrestricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream for the general benefit of the University. 3. Restricted expendable endowments - the donor has specified a particular objective other than the purchase or construction of tangible fixed assets, and the University has the power to use the capital in accordance with this objective. 4. Restricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream to be applied to a particular objective. CAPITAL GRANTS Government capital grants are recognised in income over the expected useful life of the asset. Other capital grants are recognised in income when the University is entitled to the funds subject to any performance related conditions being met. 4. ACCOUNTING FOR

RETIREMENT BENEFITS The University staff are able to join either the Teachers’ Pension Scheme (TPS) operated by the Department for Education or the Local Government Pension Scheme (LGPS) operated by the East Sussex County Council, as detailed in Note 23. Additionally, the University has agreed with the Universities

Superannuation Scheme (USS) that new staff who are in membership as at the date of joining the University of Brighton may remain members of that scheme. LGPS and TPS are defined benefit schemes and are contracted out of the State Second Pension (S2P). USS is a hybrid defined benefit/defined contribution scheme. Employer contributions, including the capitalised cost of enhanced early retirement, are charged to the income and expenditure account as they become payable in accordance with the rules of each scheme. Each fund is valued every three years by professionally qualified independent actuaries. The USS is a multi-employer scheme for which it is not possible to identify the assets and liabilities attributable to University members due to the mutual nature of the scheme; therefore this scheme is accounted for as a defined contribution retirement benefit scheme. A liability is recorded within provisions for any contractual commitment to fund past deficits within the USS scheme. DEFINED CONTRIBUTION PLAN A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement in the periods during which services are rendered by employees. DEFINED BENEFIT PLAN Defined benefit plans are post-employment benefit plans other than defined contribution plans. Under defined benefit plans, the University’s obligation is to provide the agreed benefits to current and former employees, and actuarial risk (that benefits will cost more or less than expected) and investment risk (that returns on assets set aside to fund the benefits will differ from expectations) are borne, in substance, by the University. The University recognises a liability for its obligations under defined benefit plans net of plan assets. This net defined benefit liability is measured as the estimated amount of benefit that employees have earned in return

for their service in the current and prior periods, discounted to determine its present value, less the fair value (at bid price) of plan assets. The calculation is performed by a qualified actuary using the projected unit credit method. Where the calculation results in a net asset, recognition of the asset is limited to the extent to which the University is able to recover the surplus either through reduced contributions in the future or through refunds from the plan. 5. EMPLOYMENT BENEFITS Short term employment benefits such as salaries and compensated absences are recognised as an expense in the year in which the employees render service to the University. Any unused benefits are accrued and measured as the additional amount the University expects to pay as a result of the unused entitlement. 6. FINANCE LEASES Leases in which the University assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Leased assets acquired by way of finance lease and the corresponding lease liabilities are initially recognised at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease. Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. 7. OPERATING LEASES Costs in respect of operating leases are charged on a straight-line basis over the lease term. Any lease premiums or incentives are spread over the minimum lease term. 8. FOREIGN CURRENCY Transactions in foreign currencies are translated to the functional currency of Group entities - British pound


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sterling (GBP) - at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in Surplus or Deficit. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. 9. FIXED ASSETS Fixed assets are stated at deemed cost less accumulated depreciation and accumulated impairment losses. Certain items of fixed assets that had been revalued to fair value on or prior to the date of transition to the 2015 Higher Education SORP, are measured on the basis of deemed cost, being the revalued amount at the date of that revaluation. Where parts of a fixed asset have different useful lives, they are accounted for as separate items of fixed assets. LAND AND BUILDINGS Costs incurred in relation to land and buildings after initial purchase or construction, and prior to valuation, are capitalised to the extent that they increase the expected future benefits to the University. Freehold land is not depreciated as it is considered to have an indefinite useful life. Freehold buildings are depreciated on a straight line basis over their expected useful lives as determined on 1/8/2014, the date of revaluation on transition to the 2015 Higher Education SORP. This deemed buildings to have a useful life of 100 years from the date of construction or 25 years from the date of valuation. Any refurbishments or additional costs incurred since that date (which add value) are depreciated over the remaining life of the asset.

No depreciation is charged on assets in the course of construction. EQUIPMENT Equipment, including computers and software, costing less than £20,000 per individual item is recognised as expenditure. Depreciation is charged so as to write off fixed assets in equal annual instalments over their estimated useful lives, as follows:

A review for impairment of fixed assets is carried out if events or changes in circumstances indicate that the carrying amount of any fixed asset may not be recoverable. Equipment and vehicles are shown as disposed of within the books of accounts once fully depreciated. Depreciation methods, useful lives and residual values are reviewed at the date of preparation of each Balance Sheet. BORROWING COSTS Borrowing costs are recognised as expenditure in the period in which they are incurred. 10. INTANGIBLE ASSETS Intangible assets (software) are amortised over 3 years representing the remaining estimated economic life of the assets. Intangible assets are subject to impairment reviews on at least an annual basis. 11. INVESTMENT

PROPERTIES Investment property is land and buildings held for rental income or capital appreciation rather than for use in delivering services. Investment properties are measured initially at cost and subsequently at

fair value with movements recognised in the Statement of Comprehensive Income and Expenditure. Investment properties are not depreciated but are revalued or reviewed annually according to market conditions as at 31 July each year. 12. INVESTMENTS Non-current asset investments are held on the Balance Sheet at amortised cost less impairment. Investments in associates and subsidiaries are carried at cost (less impairment) in the University's accounts. Current asset investments are held at fair value with movements recognised in the Statement of Comprehensive Income and Expenditure. 13. STOCKS Stocks, which consist of goods for resale, are stated at the lower of cost and net realisable value and are accounted for on a first-in, first-out (FIFO) basis. 14. CASH AND CASH

EQUIVALENTS Cash includes cash in hand, deposits repayable on demand and overdrafts. Deposits are repayable on demand if they are in practice available within 24 hours without penalty. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. 15. PROVISIONS, CONTINGENT

LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised in the financial statements when: a) the University has a present obligation (legal or constructive) as a result of a past event; and b) it is probable that an outflow of economic benefits will be required to settle the obligation; and c) a reliable estimate can be made of the amount of the obligation.


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The amount recognised as a provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability. A contingent liability arises from a past event that gives the University a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably. A contingent asset arises where an event has taken place that gives the University a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University. Contingent assets and liabilities are not recognised in the Balance Sheet but are disclosed in the notes. 16. ACCOUNTING FOR JOINT

OPERATIONS, JOINTLY CONTROLLED ASSETS AND JOINTLY CONTROLLED OPERATIONS

The University accounts for its share of transactions from its jointly controlled operation, the Brighton and Sussex Medical School (BSMS), in the Consolidated Statement of Income and Expenditure and the Balance Sheet. 17. TAXATION The University is an exempt charity within the meaning of Schedule 3 of the Charities Act 2011 and as such is a charity within the meaning of Para 1 of Schedule 6 to the Finance Act 2010. Accordingly, the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by sections 478-488 of the Corporation Tax Act 2010 (CTA 2010) (formerly enacted in Section 505 of the Income and Corporation Taxes Act 1988 (ICTA)) or Section 256 of the

Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied to exclusively charitable purposes. The University receives no similar exemption in regard to Value Added Tax (VAT) and so is only partially able to recover the VAT input tax suffered. Irrecoverable VAT on inputs is included in the costs of such inputs. Any irrecoverable VAT allocated to fixed assets is included in their cost. The University’s subsidiaries are liable to Corporation Tax in the same way as any other commercial organisation. 18. RESERVES Reserves are classified as restricted or unrestricted. Restricted endowment reserves include balances which, through endowment to the University, are held as a permanently restricted fund which the University must hold in perpetuity. Other restricted reserves include balances where the donor has designated a specific purpose and therefore the University is restricted in the use of these funds. 19. SIGNIFICANT ESTIMATES

AND JUDGEMENTS In the process of applying these accounting policies, the University is required to make certain estimates and judgements that management believe are reasonable based on the information available. Significant estimates and judgements used in the preparation of the financial statements are as follows: Local Government Pension Scheme (LGPS) – Note 23 The calculation of the scheme’s liabilities involves projecting future cash flows many years into the future. This means that the economic and demographic assumptions used can have a material impact on the balance sheet provision and Other Comprehensive Income. For example, members could live longer than foreseen or inflation could be higher or lower than allowed for in the calculation. The assumptions used by

the actuary are included in note 23 to the accounts. University Superannuation Scheme (USS) – Note 23 The University has an obligation in respect of the funding deficit plan for the USS pension scheme. In estimating the present value of the obligation, the University has used the deficit modeller provided by the British Universities Finance Directors Group (BUFDG), and has applied assumptions around salary inflation and the discount rate to be used. Fixed Assets – Note 11 Depreciation is calculated on a straight-line basis over the estimated useful economic lives of the related assets. Impairments Management make judgements as to whether any indicators of impairment are present for any of the University’s assets. Trade Debtors – Note 14 An assessment is made over the recoverability of debt balances outstanding at year end. This review takes place across the different categories of debt.

UNIVERSITY OF BRIGHTON ANNUAL REPORT 2018-19 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2019

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These financial statements were approved by the Board of Governors on 27 November 2019.

Signed on behalf of the Board of Governors

Mark Burch Debra Humphris Governor and Chair of Governing Body Governor and Vice-Chancellor


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