Annual Report

Annual report and financial statement for year ending 2010/11

1. Structure, governance and management

1.1 The history of the governance of Bristol Charities

Bristol Charities was formed as a result of the 1835 Municipal Corporations Act, when the Trustees assumed responsibility for the administration of the majority of the charities that had formerly been under the control of the Corporation of Bristol. These consisted of three almshouses, offering 'accommodation to the poor', and fifty- three non-educational charities, principally involved in 'gifts to the poor'. In addition, three schools were also transferred to the Trustees, being the Free Grammar School (now known as Bristol Grammar School), The Red Maids' School and Queen Elizabeth's Hospital. With effect from September 2004, each of the three schools incorporated and the endowment funds were transferred to those new incorporated bodies. More information about the history of the charities can be found on the website; www.bristolcharities.org.uk.

In the late nineteenth century the charity became known as "Bristol Municipal Charities" but in April 2002 the name of the body reverted to "Bristol Charities." The current work of Bristol Charities is given below and the Bristol Charities website provides detailed information.

The Trustees have identified a number of key charitable activities and these include the provision of modern almshouse accommodation, grant-giving and a range of services for older people. In particular the Trustees have identified the need to ensure that the charitable assets are put to best effect to meet the current needs of individuals in need within the city of Bristol. The Trustees have also recognized that the provision of services to charities located outside of Bristol, particularly almshouse charities, ensures that the knowledge and experience gained in Bristol can be shared with other charities, to the mutual benefit of those involved. During the course of the Trustees’ annual Away Day held on 24 May 2011, it was agreed that ad-hoc committees would be formed to examine and report upon a number of areas including external relations, services provided and investment policies. It is intended that the findings of the committees will form the basis of a business plan.

1.2 Governance

In April 2005, Bristol Charities was incorporated, in the form of a company limited by guarantee, at which time the Trustees became directors of that company. The company “Bristol Charities” serves as sole trustee of the many charities under its control. The Memorandum and Articles of Association now serve as the governing documents of Bristol Charities, whereas each charity has its own charitable scheme, describing its objects.

Appointment of the Chairman of Trustees

Mr Barry England retired as Chairman of Trustees on 31 March 2011, after serving in that position for nine years.

Mr Andrew Hillman was elected as Chairman with effect from 1 April 2011.

1.3 Appointment of Trustees

The Nominations Committee, whose membership consists of the Chairman, Vice Chairman and the chairmen of the various committees, has developed a policy for the identification and recruitment of new Trustees. This involves the creation of a matrix of skills and experience required and this is considered in the context of the skills and experience of existing Trustees. The Trustees have agreed that ideally between 16 and 19 Trustees should serve on the board at any one time. The Nominations Committee meets at least once a year to review the contents of the matrix, in the light of the changing requirements of Bristol Charities, and anticipates those gaps in the matrix that may be created by retirement or other changes. Potential Trustees are identified as follows:

• Candidates recommended by existing Trustees.
• Approaching other organizations for recommendations.
• Advertising with the local press and an institute of higher education has been carried out in the past.

All potential Trustees are provided with a comprehensive pack of information; annual accounts, Company governing documents, committee structure and the terms of reference, a history of the Charities, sample minutes, reports and budgets. They meet with the chairman of Trustees and they are also encouraged to consult our comprehensive website, visit our offices and meet with the Chief Executive. All candidates are interviewed by the Chairman and at least one other member of the Nominations Committee. A curriculum vitae and report is then provided to all Trustees and the application is considered at a meeting of the board of Trustees.

Following a Trustee's appointment, a full briefing is provided by the Chief Executive and new Trustees are encouraged to visit the almshouses, day centres and other premises. Appointments to appropriate committees follow, once new Trustees have had an opportunity to observe Committee meetings.

A process for the 'rotation' of Trustees and appraisal was agreed by the trustees in November 2009 and is in the process of being implemented.

1.4 Organisation and structure

The board of Trustees meets on a three-monthly cycle and it has responsibility for strategic long-term planning, monitoring of performance and regulatory compliance. The implementation of the agreed strategy and the day-to-day management of Bristol Charities are delegated to the Chief Executive. In order to assist in the process of developing strategic matters, the Trustees hold an annual ‘Away Day’, which has proved to be an extremely valuable opportunity for the Trustees to review the role and governance of Bristol Charities, consider its current work and discuss its future objectives.

The Away Day held in May 2011 included a presentation in respect of the financial position of Bristol Charities, the services provided for older people and a discussion concerning the future role of Bristol Charities. As described above, this discussion led to the creation of a number of ad-hoc committees to examine different aspects of Bristol Charities.

Trustee responsibility for the operational output of Bristol Charities is delegated to three main committees which meet on a regular basis, each chaired by a Trustee. Those committees are as follows;

• Services Committee
  This Committee is responsible for the residential accommodation and day services for older people. The Committee meets six times a year. The committee monitors performance against the plans and budgets and the minutes of its meetings, as with all committee minutes, are presented to the board of Trustees.
• Grants Committee
  The Committee is responsible for agreeing the criteria for grant-giving and reviewing the process for the grant-giving charities. The Committee meets twice a year.
• Assets and Finance Committee                                                                                                      The Assets and Finance Committee is responsible for reviewing the performance of these assets, including an assessment of risk, asset allocation, selection of professional advisers, agreeing and reviewing the Trustees’ investment policy, the setting of appropriate benchmarks and monitoring the performance of those advisers during the course of an annual review. The committee meets four times a year.  The Committee has overall responsibility for all endowment and operational property and non-property investments and assets. In addition, it reviews the consolidated annual operating and capital project budgets, within the context of Bristol Charities’ strategic plans, and the central management income and expenditure.

The Audit Committee is chaired by a Trustee who is a Chartered Accountant. It is responsible for the review of the external audit of the financial statements, the requirement for any internal audit projects and the review of risk management. The Audit Committee is also responsible, subject to Trustee confirmation, for the appointment of the firm which conducts the external audit.

The Trustees considered and agreed a risk management strategy at their meeting in March 2004 and since that time the Audit Committee has reviewed risk management on a regular basis. As agreed by Trustees, “major risks” are those risks that are assessed to have a high likelihood of occurring and would, if they occurred, have a severe impact on operational performance, achievement of aims and objectives or could damage the reputation of the charity.

The last review was carried out by the Audit Committee on 1 June 2011.

 Trustees have therefore established a framework that allowed them to:

• identify the major risks that apply to Bristol Charities;
• make decisions about how to respond to the risks which they face, 
• make an appropriate statement regarding risk management in the Trustees' annual report.

Future internal audit

The internal auditors had presented a favourable report on the outcome of the internal audit work which they had carried out on behalf of Trustees since their appointment in the 2006/2007 financial year. They stated that since their appointment the internal auditors had examined all the main areas of risk or potential concern and that they were able to recommend that in future the Trustees should consider commissioning internal audit services on a 'needs basis', that is where particular capital projects or changes in personnel or systems required examination. They believed that this approach would lead to a better use of the resources available. This recommendation was accepted by the Audit Committee, which also agreed that certain areas, such as governance, should be subject to triennial or four-yearly reviews. This recommendation was subsequently accepted by the board of Trustees.

The Remuneration Committee has the responsibility for the review of the Chief Executive's remuneration and that of other members of the senior management team.

The Chairman and Vice Chairman are appointed at the time of the Annual General Meeting of Bristol Charities with the term of the appointment to run until the next Annual General Meeting.

The Trustees undertook a 'committee effectiveness' review in the spring of 2008 and the current committee structure, which is described above, was introduced with effect from June 2008.

The Capital Projects Committee is convened when the Trustees embark upon a major building project and it meets, as required, to provide Trustees with the necessary assurances about the management of on-going and proposed capital construction projects.

2. Public benefit; as defined by the Charities Act 2006.

In reviewing the disparate work of the charities that form Bristol Charities, the Trustees can report that the two key principles that underpin ‘public benefit’ have been met;

• there is always an identifiable benefit or benefits and these are apparent from the contents of the Annual Report and are all related to the aims of the charities.
• there is a benefit to the public or a section of the public. The beneficiaries are appropriate as laid down by the aims of the various charities and there are no unreasonable restrictions. It is recognized that the trustees exercise a discretion in deciding upon who will benefit from the charities but that this is permissible under the aims and objects of the charities concerned and the beneficiaries constitute a ‘section of the public’ and therefore this is a reasonable exercise of that discretion.

The aims and objects of Bristol Charities are contained in the company’s memorandum of association. The Trustees confirm that they;

• ensure that they pursue the aims and objects of the various charities for the public benefit, as defined by the Charities Act 2006.
• have proper regard to the guidance published by the Charity Commission in respect of the subject of public benefit.
• confirm that this Annual Report provides sufficient information as to the ways in which the public benefit is achieved.

3. Objects and activities

Bristol Charities has four main areas of activity:

• Orchard Homes. A Registered Social Landlord, is primarily a provider of almshouse accommodation for older people. In 2009/2010 there were five active groups of almshouses, being Barstaple House, Perrett House, Red Cross Mews, Manor House and a new almshouse, John Foster's, which was practically completed in March 2009 with the first residents moving-in two months later.
  
  In addition, those properties that form the 'Furber Fund' also fall within Orchard Homes; they consist of 9 three-bedroom semi-detached houses, 1 three-bedroom terraced house and 1 two-bed flat.
  
  The trusteeship of The Manor Home for Elderly People was transferred to Bristol Charities in 14 July 2008.
  
  The trusteeship of the Stokes Croft Almshouse Charity, which is located in Redland, Bristol, was transferred to Bristol Charities in December 2009. This was with the explicit intention of selling the existing building and reinvesting the entire proceeds of sale in the next new almshouse developments.  Following the relocation of the residents, the property was sold by auction on 20 October 2010 for £384,000.

 The Trustees have identified the site for the next almshouse development which they will develop in Bristol and more details are given below.

• Grant giving. - There are A number of grant-giving charities but the main ones are ‘Relief in Need’, ‘Relief in Sickness’, the ‘Guild of the Handicapped’ and the ‘Miss Merchant Fund’. There are also a number of smaller charities. Grants are made primarily to individuals, mainly in the form of vouchers that are used to acquire specific goods, although the Trustees have, in recent years, created a ‘retained ownership scheme’, whereby items such as electric wheelchairs and scooters are acquired for named individuals but the ownership is retained so that the items can be recycled if the original recipient no longer requires those items. In the year to 31 March 2011, the Trustees awarded grants of £277,721 (2010: £295,040).

The Trustees have regularly reviewed the grant-giving operation and the implementation of the outcome of the July 2010 review was reviewed at the Grants Committee meeting held in November 2010.

• Day services. - This activity mainly provides and manages day and other services for older people. The Trustees have managed the Beehive Centre in St. George, Bristol since September 2001 and they opened the Henbury Centre as a purpose-built day centre in January 2005. Bristol Charities has a contract with Bristol City Council in respect of both centres although the future of that funding has been in question since October 2010. 

For a number of years the Trustees have utilised some of the grant-giving funds to allow additional older people in need to attend the Henbury Centre. Approximately 240 people a week attend the two centres; the majority are transported to the centres and meals are provided together with a range of activities. The centres provide an effective means of combating ‘social exclusion’.

The Trustees have acquired a 21-year lease in respect of the Summerhill Club in St. George and they have invested £200,000 in the refurbishment of the 1960s building to allow it to provide a range of services for older people and others in the local community. The Centre reopened in March 2011 when the day service from the Beehive Centre relocated to the new venue.

• Management and consultancy services for other charities. Bristol Charities has been working closely with the Haberdashers' Company, a City of London Livery Company, since 2005. The Haberdashers' Company acts as Trustee of the William Jones's Almshouse Charity, with almshouses in Monmouth, South Wales and Newland, Forest of Dean. Bristol Charities was originally commissioned in July 2005 to carry out a research project, which subsequently resulted in Bristol Charities appointment as 'development agent' in July 2006. In January 2007 Bristol Charities assumed direct management responsibility for the William Jones's Almshouse Charity, as part of the preparations for the proposed redevelopment of the Monmouth almshouse site. In preparation for that redevelopment, Monmouth residents have been temporarily relocated and the almshouse closed in May 2008, in advance of demolition and redevelopment.
  
  The Newland almshouse, consisting of the almshouse building and the Lecturage (warden's house), was sold in 2010.

The details of a joint venture with a private developer which would allow the re-provision of the Monmouth almshouse were agreed in early 2010 and a planning consent was achieved in June 2011.

The trusteeship of the William Jones Almshouse Charity was transferred to Bristol Charities with effect from 24 June 2011.   

St. Augustine’s Consulting Limited The Trustees agreed at the Away Day held in May 2011 that the consultancy work carried out by the Chief Executive within this separate trading entity should be scaled back due to the impending capital projects that were in the process of being planned.  

St. Augustine’s Consulting Limited had been formed in June 2006 and the income from the company was transferred, by means of ‘gift aid’, to Bristol Charities. In the past St Augustine’s Consulting Limited has carried out work for a number of other charities including three of the ‘Great Twelve’ City of London Livery Companies: the Drapers, the Fishmongers and the Haberdashers. Consultancy work continues in respect of the merger of a number of almshouse and grant-giving charities based within the London Borough of Southwark.  

Trustees have agreed that any limited consultancy work carried out in future would be carried directly under the auspices of Bristol Charities; this is permitted under the company’s objects.  

In terms of the remaining work completed in 2010/2011; this involved the completion of the merger of a number of almshouse and grant-giving charities within a new charity to be known as ‘Southwark Charities’. On 1 December 2010, the Charity Commission agreed to the inclusion of a uniting direction within the draft scheme for the merged charity and that concluded the project. It is anticipated that the newly created ‘Southwark Charities’ will consolidate its role as an ‘umbrella’ organisation within the Borough.

• Bristol Charities has managed two other Bristol-based almshouse charities, on behalf of their respective boards of trustees. The Bristol and Anchor Almshouse Charity had been managed since September 2001 and the Lady Haberfield’s Almshouse Charity had been managed since April 2002. For a range of reasons, the Trustees decided to withdraw from those management arrangements and the management agreement with Bristol and Anchor Almshouse Charity ended on 31 March 2011 and that with Lady Haberfield Charity on 30 September 2011.

The Bristol Charities website; www.bristolcharities.org.uk provides a comprehensive record of the work of Bristol Charities and its history. The website is viewed as an important way of informing stakeholders, beneficiaries, potential benefactors and those with a general interest in the work of Bristol Charities.

4. Activities

 4.1 New almshouse developments

The John Foster’s Almshouse, Crow Lane, Henbury                                                                                        This new almshouse, completed in March 2009, is perceived to be the template for the specification of almshouse accommodation for older people in need, which the Trustees intend to develop in various parts of Bristol, as well as in Monmouth. The almshouse continues to attract positive comments and it was the subject of a feature article in the Bristol Evening Post, entitled ‘A home for tradition’, on 28 June 2011 (please see the website for details.)

Acquisition of the former Methodist Church site at Lower Knole Lane, Brentry, to construct the new Barstaple Almshouse  In line with the policy to dispose of almshouses which are no longer suitable to provide appropriate accommodation, the Trustees sold the old Barstaple Almshouse in Old Market, Bristol, in January 2011.  

In readiness for the re-provision of the Barstaple Almshouse, the site in Lower Knole Lane was acquired in September 2010. It is anticipated that the site will provide for at least 30 one- and two-bedroom flats, plus a day centre which will provide community space for older people. A planning application was submitted on 25 March 2011 but the application was withdrawn in June 2011 due to last-minute objections by the City Council planners. A planning consent is anticipated during the autumn of 2011 and the new almshouse would be completed in spring 2013. 

Disposal of Bengough’s House site, Crow Lane, Henbury, Bristol                                                                   Completion of the sale of the former care home known as Bengough’s House was achieved in July 2010. The proceeds of sale will be reinvested in a new Bengough’s Almshouse. Bristol Charities is actively engaged in seeking a suitable site for an almshouse development in south Bristol and, following site inspections, a number of possible sites are being examined.

The William Jones’s Almshouse Charity, Monmouth                                                                                          As stated above, the trusteeship of the William Jones’s Almshouse Charity was transferred from the Haberdashers’ Company from 24 June 2011. Bristol Charities has directly managed the William Jones’s Almshouse Charity since January 2007. The Haberdashers’ Company had been the trustee for 397 years and it was commemorated at Haberdashers’ Hall, West Smithfield, London, on 23 June 2011 when the Master of the Company handed a vellum scroll to the Chairman of the Trustees of Bristol Charities, Mr Andrew Hillman.  

The current set of Monmouth almshouses date back to 1961 and they have been empty for some time, in readiness for the redevelopment of the site. 

A planning consent was obtained in June 2011 and it is intended to replace the 20 former almshouse units, which were mainly bed-sits, with 24 one-bedroom ‘independent-living’ flats, identical in specification to the successful design of the flats built at John Foster’s Almshouse in Brentry.  

It is anticipated that the project will commence on site in the autumn of 2011 and that it would be completed in 2013.

The Joseph Neeld Almshouse Charity, Wiltshire
Bristol Charities had been invited to advise the trustees of this charity based at Leigh Delamere concerning a range of financial, management and property related problems that had been experienced by the charity over a number of years. Following discussions with the Charity Commission, the Trustees and their legal advisers it was agreed that the trusteeship of the charity would be transferred to Bristol Charities whilst preparations were made for the sale of the almshouse. The trusteeship was transferred on the basis of a Charity Commission Order dated 16 August 2007 and the almshouse building was sold in March 2008.

The proceeds of sale had been used to both acquire a house in Kington St. Michael in July 2010 and the works to refurbish that house to provide two almshouse flats which will be completed in October 2011.  

4.2 Developing day services

Bristol Charities currently provides a full range of day services at the Henbury Centre and at the Summerhill Centre, St. George, as stated above. More information is provided on the website.

Trustees view the provision of day services as a vital element of support that should be made available to older people who live alone. It has demonstrable benefits in addressing care needs and social exclusion. Bristol Charities has developed expertise during the course of the last ten years and Trustees are examining that day service provision against a background of a reduction in local authority funding.

5. Financial review, investment & reserves policy

Following a selection process in January 2008, two firms, Baring Asset Management and Smith & Williamson Investment Management Limited, were appointed to manage the non-property investments and each was allocated 50% of the portfolio. The members of the Assets and Finance Committee meet with each of the firms on a regular basis to review their performance against agreed benchmarks. Trustees have agreed that the two firms would be appointed for a further two years, until February 2013, at which time the Trustees would consider the position.

Bristol Charities is financially strong, with reserves of approximately £24 million.  Of these, £2.1 million consist of Unrestricted Funds, of which approximately £1.6 million is held in cash. Of the Restricted Reserves of £0.86 million, nearly £0.46 million is held in cash, which represents the undistributed balances from our grant-giving activities.  The almshouses operation generates a surplus and the policy of Trustees is that the accumulated surplus will be put towards the cost of new almshouse accommodation.   

The central costs were well controlled, increasing at no more than RPI.  These costs are allocated to the Charitable Activities, Grant-giving, Investment Management and the two other charities which we manage.  By dint of careful management Bristol Charities’ central management costs have created a surplus to date of £873,123, which includes profit on disposal of properties of £540,125 (2010: £350,859 surplus).  

The investment policy is for a balanced return with a medium level of risk. The Trustees seek to produce the optimum total return, commensurate with at least maintaining the capital value in line with inflation, as defined by the National Statistics. Each of the investment managers is instructed to generate, at the present time, a minimum spendable return of £160,000 per annum, with the value of the income generated to rise in line with average earnings.

Reserves policy                                                                                                                                       The reserves policy was agreed by Trustees on 25 January 2011.  

Bristol Charities/Orchard Homes is financed by a combination of permanent endowment, endowment recoupment reserve, restricted reserves and unrestricted reserves, including designated reserves.  These reserves, their uses and the movement thereon in the year are set out in the Notes.

The recurring operating income of the company has historically been predictable, comprising a combination of investment income on the permanent endowment and surpluses from almshouse provision and other activities. However, the Trustees are mindful of the need to conserve a reasonable level of unrestricted reserves in order to ensure that the needs of beneficiaries may be consistently met through periods of economic downturn, when calls on funds may be greater. Trustees believe that unrestricted cash reserves of not less than six month’s operating costs, including the historic level of grant-giving, are appropriate for this purpose.  

Trustees are mindful of the ever-greater need for almshouse and day services provision demanded by an ageing population and the ever-higher specification required. They will seek donations towards the permanent endowment in order to increase the stock of accommodation but also believe it reasonable to retain surpluses from operations in order both to update existing accommodation and to build new almshouses. To assist in the latter, Trustees are prepared to engage in prudent borrowing.

6.  Going concern                                                                                                                                                                              The Trustees consider that the demand for the charity’s services will continue.  The Trustees continue to ensure that the risks associated with financial markets relating to the investments are minimised. The Trustees have a reasonable expectation that the charity has adequate resources to continue for the foreseeable future.  Accordingly, they continue to adopt the going concern basis in preparing the report of the Trustees and financial statements. 

7. Auditor                                                                                                                                                                                              Deloitte LLP have indicated their willingness to continue in office.   

8. Trustees’ Responsibilities Statement  

The trustees (who are also directors of Bristol Charities for the purposes of company law) are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and regulations.

 Company law requires the trustees to prepare financial statements for each financial year.  Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the trustees are required to:  

-          select suitable accounting policies and then apply them consistently;                                                   -          observe the methods and principles in the Charities SORP;                                                                 -          make judgments and estimates that are reasonable and prudent;                                                      -          state whether applicable UK Accounting Standards have been followed; and                                          -          prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.  

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.  

In so far as the trustees are aware:                                                                                                            -          there is no relevant audit information of which the charitable company's auditor is unaware; and              -          the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

In addition there are committees which meet less frequently but have specific terms of reference. Those committees include the Nominations Committee, which is mentioned above, in addition to the following: