UCA Financial Statements 2018-19-1575024120005

University for the Creative Arts Financial Statements for the year ended 31 July 2019 Consolidated and University Statement of Comprehensive Income 28 Consolidated and University Statem

University for the Creative Arts

Financial Statements

for the year ended 31 July 2019

University for the Creative Arts

Financial Statements for the year ended 31 July 2019

Consolidated and University Statement of Comprehensive Income 28

Consolidated and University Statement of Changes In Reserves 31

This document constitutes the annual report

University for the Creative Arts

Strategic Report

The University is a Higher Education Corporation (HEC) and an exempt charity under the terms of the Charities Act 2011 This review summarises the Board’s assessment of how we have delivered our charitable purposes for public benefit and of our overall performance in 2018/19 In preparing this review, the Board of Governors has had regard to the Charity Commission’s guidance on public benefit

The University’s Beneficiaries

The University’s charitable objects, derived from the Education Reform Act 1988: Section 124, are the advancement of further and higher education (FE and HE) and research Our students are the University’s primary beneficiaries However, our beneficiaries also include employers and businesses within the creative industries sector and beyond; external researchers and members of the public who visit our galleries and the Crafts Study Centre, a specialist museum, charity and research centre on our Farnham campus; and school children, local communities and our alumni who attend educational events organised by the University and make use of its academic facilities

We do not believe that UCA carries out any activities that could harm its beneficiaries and we are not aware of views amongst others that such harm might arise No serious incidents of material significance were reported

in 2018/19

The University’s 10 Year Strategy

Since the arrival of its Vice-Chancellor, Professor Bashir Makhoul, in June 2017, the University has sought to build on its activity over the previous five years, which saw it significantly raise its profile and reputation, to pursue a strategic direction that will ensure its resilience and financial stability, as well as enhancing still further its educational offer The University is seeking to build on what it does best, with its focus being set on the broader needs of the creative industries, as exemplified by its creation of a Business School for the Creative Industries – the first of its kind in the UK Pursuit of the two key objectives of recruitment and enhancement will enable the University to invest in its future development, whilst working in partnership with its students and other organisations to co-create the student experience, expansion overseas, and robust recruitment pipelines Following the arrival of the new Vice-Chancellor, a review of the University’s Strategic Plan has taken place This signals a change in the positioning of the University and identifies that it intends to be:

• Recognised as a global authority on creative arts, creative technologies and business for the creative industries

We will:

• Grow our student numbers, increasing the profile and reputation of the University nationally and internationally and developing mutually beneficial partnerships, to deliver a sustainable financial position and more resilient organisation

• Build upon what we do well, reviewing our portfolio and ensuring that the activities we undertake are effective, coherent and viable, both educationally and financially

• Review the use of our resources, including the quality of our estate, to ensure our total offer is attractive

to students and provides a meaningful educational experience

Modern University of the Year, League Table Performance and TEF

In September 2018 UCA was named the Modern University of the Year in The Times and The Sunday Times

Good University Guide 2019 In addition to receiving this accolade, the University achieved the following

rankings in the Guide’s league table:

• Top creative specialist institution

• Top 10 for teaching quality

• Top 40 for social inclusion

• Joint top modern university

• Highest climber, up 25 places

This was followed later in the year by the news that UCA had also been ranked as the top creative specialist institution in both the Complete University Guide and the Guardian University Guide, with an overall position of

13th amongst all UK universities in the latter table 2018/19 culminated in the University being awarded Gold under the Teaching Excellence and Student Outcomes Framework (TEF), the panel identifying ‘outstanding levels of stretch that ensure all students are significantly challenged to achieve their full potential.’

Open College of the Arts

On 1 November 2016, the distance learning provider Open College of the Arts (OCA), became a wholly owned subsidiary of the University OCA is a charitable company limited by guarantee established in 1987

In line with the University’s academic strategy, this new member of the group adds distance learning and online degrees at undergraduate and postgraduate level to UCA’s course portfolio and secures the University’s vision

of opening up access to creative arts education at university level to everyone, wherever they are in the UK and beyond UCA has validated all of OCA’s undergraduate and postgraduate qualifications since 2012

This relationship between two long-established creative arts providers means more choice and flexibility for students, providing opportunities for undertaking undergraduate or postgraduate courses to develop their career and/or improve their quality of life

OCA’s mission remains “To be at the forefront of student-led creative arts education through innovative open, enhanced, & supported distance learning, for an evolving society.”

OCA has an Academic Strategy and complimentary Digital Transformation Strategy which set the agenda for the organisation for the next three years and form an element within UCA’s ten-year Strategic Plan

This year OCA has established a corporate annual plan which sets out the work that will be undertaken towards meeting these goals; key objectives include:

• Deliver an ambitious strategic plan that establishes “UCA Open” whilst maintaining OCA charitable purpose for social impact and widening access to arts education;

• Conduct reviews of OCA, and OCA functions, to understand and improve organisational alignment within the UCA group;

• Establish a digital transformation strategy that provides a new student experience, more peer learning support, increased opportunity for community and collaboration, online portfolios and enhanced practice around feedback and assessment;

• Improve financial, HR and operating processes, with appropriate auditing and control;

• Embed new marketing, market research and sales approach to improve enquirer conversion and increase enrolments;

• Implement “projects” for knowledge exchange;

• Establish a pipeline for external funding and Enterprise to mitigate reduction in grant funding and to diversify income;

• Improve offers and awards (including short courses, Level 3 foundational studies and wider graduate offers);

post-• Establish new curriculum and assessment models with a focus on digital assessment;

• Refresh the curriculum through periodic review in 2020;

• Introduce Learning Design across all programmes to improve course production;

• Establish a focus on digital pedagogy, in partnership with UCA

Business School for the Creative Industries

The Business School for the Creative Industries, established to articulate and support the needs of the creative industries in terms of business professionals, has successfully completed its first full year of operation At its inception, the School commenced delivery of 3 new courses and continued the teaching of others realigned to

it from elsewhere in the University – specifically those that already had a focus on business disciplines such as marketing

In its first full year, the School successfully implemented the migration of courses, with student satisfaction at least maintained and, in many cases, improving The School was also given its own location within the Epsom campus, which provided it with a good initial opportunity to cohere

The new Director of the Business School arrived at UCA in May 2019 and has begun a strategic development review to articulate a full plan for the growth and implementation of the Business School over the next 3 - 5 years The start of this process has been the engagement over the previous 3 months with several external bodies and a wide range of employers within the creative industries to develop an understanding of their needs and requirements for courses

The first stage of these new developments will be the proposal of a new School portfolio for 2020/21 entry This development seeks to align the portfolio to the wider UCA portfolio and educational offering, as well as providing

an opportunity to meet the ambitious student recruitment targets for the Business School as a whole

UCA International College

UCA and the Holmes Education Group have jointly agreed to the set-up and operation of the UCA International College (UCAIC) which will be based within the Epsom campus The UCAIC offers a Stage 0 course which articulates into most UCA undergraduate and postgraduate taught courses The courses have been approved

by the University and offer students the opportunity to develop their understanding of art and design or business, and to develop their English for Academic Purposes in advance of their choice of undergraduate or postgraduate course

The first intake of students arrived in September 2019, and in advance of this UCA and UCAIC worked together

to implement an operational model to welcome the students and ensure that the courses support the broad strategic growth objectives of the University

Students

In 2018/19 the University saw an overall increase in student numbers This was due to significant growth in overseas numbers, especially at postgraduate level, as a result of increased investment, targeted strategic recruitment and new collaborative arrangements, especially within China Overseas numbers have now increased for the sixth year in succession, rising by over 148% since 2013/14 Recruitment to undergraduate and postgraduate programmes has risen by 50% in the last year Postgraduate recruitment alone has almost doubled in one year (+94%) The Home/EU undergraduate (UG) market remains competitive and recruitment has slipped by just -0.7% Postgraduate (PG) numbers at Home/EU level have increased once again on the previous year and more than doubled in the last six years, but this remains a challenging market, with recruitment levels still relatively low

There was a decrease in recruitment at pre-degree/further education (FE) level continuing the downward trend over the last six years; this included a sharp decrease in Home/EU numbers, largely due to falling demographics

In response to these trends, student recruitment and retention continued to be a priority throughout the year Further demand-orientated portfolio development has also increased the breadth of postgraduate provision in the Business School for the Creative Industries and design-related subjects (Interiors, Graphics and Fashion) and together with the establishment of new collaborative overseas partners has resulted in increased recruitment across all these portfolio areas A drive to increase FE recruitment has led to the introduction of several Extended Diploma programmes to meet increasing local demand at ages 16-19 We expect to see these initiatives bear fruit in the 2019/20 and 2020/21 recruitment cycles

Student Numbers (FTE)

UCA

Category 2018/19* 2017/18 2016/17 2015/16 2014/15 2013/14 Higher Education:

**These figures include all distance learning students (excluding withdrawals) who were studying on

a module at any point during the 2018/19 academic year Some of these students will have completed

a module during the year and not yet progressed onto a new module but remain within their registration period and so remain registered on the course of study

Outreach

UCA believes that a diverse community is an essential foundation of creativity The University is committed to providing a range of long-term outreach activities targeted at groups that are under-represented in HE, working collaboratively to raise student attainment in creative areas, including art, design, technology, music and performing arts The University’s policy and practice regarding Widening Participation (WP) in HE is guided by the National Strategy published in 2014 by the Department for Business, Innovation & Skills (BIS) which emphasised the role HE institutions should play in ensuring that “students from disadvantaged backgrounds can access higher education, get the support they need to succeed in their studies and progress to further study and/or employment suited to their qualifications and potential.” The University is fully committed to the Government’s policy to see “a society becoming less stratified by socio-economic class” and is proud of its record on WP Our internal records show in 2018/19, 9.9% (2017/18: 12.4%) of our students came from Low Participation Neighbourhoods (POLAR 3, Ward 1) and 10.8% (2017/18: 13.8%) were in receipt of Disabled Students’ Allowance

UCA is committed to delivering sustained and coordinated outreach activity across the South East to a network

of wide-reaching partner schools and colleges The University has built partnership agreements with schools and colleges to deliver sustained engagement with appropriate learners, breaking down barriers to enable

progression to further and higher education Through these creative partnerships we also provide schools and colleges with access to creative careers tools, resources, events and activities We have offered a range of subject-specific workshops and taster days, and on-campus Easter and Summer School programmes Our WP activities include Saturday Clubs on all four campuses, as well as a developed range of creative workshops delivered both in schools and on campus for all year groups, and an extended mature learners project

Our overarching ambition is to ensure an institution-wide commitment to eliminating equality gaps, being systematic in the ways that we do this to ensure the opportunities for students when they leave UCA are also equal This commitment is aligned to the work of UCA’s Equality, Diversity & Inclusivity Committee and UCA will support the goals of other strategic stakeholders, such as Arts Council England, to align with the ‘Creative Case for Diversity’, ensuring that creative industries employers are also supporting the agenda for equality and that collectively we develop a more diverse sector

Additionally, UCA Students’ Union (UCASU) has identified sector practice at other students’ unions regarding children of asylum seekers and supporting their access to HE, and has stated that this is something that it wishes to support through its work in Medway It has also recognised opportunities for a buddy scheme to be promoted and supported by the SU

UCA is a member of the United Kingdom Arts and Design Institutions Association (UKADIA) Widening Participation Group, a partnership of specialist institutions whose attention is focused on supporting specialist arts teachers to raise attainment in under-represented groups and deliver specialist continuing professional development (CPD) workshops and opportunities UCA is also a member of the Care Leavers Progression

UCA has a significant commitment to FE, with a population of just under 1,000 students (17% of UCA’s student population), providing 16-18 Extended and Foundation Diplomas in Art and Design These provide an alternative route for students who find it difficult to access the more traditional A Level route or who may not have sufficient confidence or knowledge of the creative arts to determine their choice of HE study at 18 years old Our cohort of 16-18 learners are mainly local to the campuses, providing an opportunity for those who want

to stay at home throughout their studies to do so These courses provide a vital and strong internal progression route to UCA’s HE provision

The Financial Assistance Fund (FAF) is funded by UCA to support Home UG and PG students who may be at risk of not completing their course due to financial hardship Awards are generally given as grants but short-term loans are also available Eligible students must have taken their full entitlement to any statutory funding and demonstrate a financial need In 2018/19 the University paid £92k to eligible students

Following our merger with OCA in November 2016 the University’s part-time and distance-learning offer is now more accessible OCA, as a provider of high-quality HE courses in partnership with the University, has an obligation to encourage attainment and to push the boundaries of WP to ensure that more students than ever before gain qualifications by operating an open access policy and allowing students to complete a UG degree

at a pace more suited to demanding and varied domestic circumstances The College population consists entirely of part-time distance-learning students with a forecast headcount of 1,650 enrolments for the 2019/20 academic year

Student Experience

Learning Environment

The University’s Capital Investment Programme (CIP) is updated on a quarterly basis and reviewed by Governors to ensure that it aligns with the agreed estate and infrastructure developments, the academic strategy, and bank covenants

Major estate developments which have taken place during 2018/19 are as follows:

Canterbury Campus: - Means of Escape upgrades to Blocks D, F, G - £0.20m

Epsom Campus: - Kitchen flooring and ventilation upgrades - £0.13m

- Courtyard Improvements - £0.40m

- Provision of Non-Gender Specific WC’s to Main Building – £0.15m Farnham Campus: - Completion of new Film & Media Centre including Conference Facilities -

£5.30m

- New Kiln and Ceramics Room - £0.42m

- New Jewellery Workshop including Gemmology and Hammer Room - £0.65m

- Completion of design for Courtyard improvements and implementation of new platform lifts to improve accessibility - £0.13m

- Provision of new staff accommodation (in Car Park A) - £1.50m

- Provision of new infrastructure (electricity, gas and water) supplies to meet growing demand - £0.50m

Rochester Campus: - Provision of a new Hair & Makeup Salon - £0.38m

In addition to new build and refurbishment projects the University has completed works on boiler and lift replacements at Farnham and Epsom during the summer of 2019 Student residences at Rochester, Canterbury and Farnham will also continue with their refurbishment and modernisation programmes In addition, works are ongoing by external developers to provide 99 new bedrooms at Bradford House, Epsom by August 2020 Looking forward, the two main estates projects for 2019/20 and beyond will be focussing on:

Epsom Campus: - the new Business School for the Creative Industries, including ancillary

projects

Farnham Campus: - the provision of 252 new student residences and the improvement to the

central courtyard for new student support

In addition to the Estates developments, the University has invested £1m in its IT infrastructure, digital services and cybersecurity During 2018/19, the University invested £500k into high-end computing facilities to support digital arts and £200k into enhancing the network infrastructure and improving the University’s cybersecurity position An investment of £90k was made to provision the IT Infrastructure and network connectivity for the Film and Media Centre and new Modular Building in car park A and an investment of £110k was allocated to the continued development and enhancement of University digital services including the learning management system, finance system, service management system and library systems The value of this investment is included in the assets in the course of construction and equipment categories within tangible assets

Teaching and Learning

UCA is a centre of excellence supporting the UK’s world-leading reputation across the full breadth of creative professions at its four campuses and through partnerships UCA prepares students for employment in the creative industries through the provision of intensive, studio-based education supported by staff that are eminent in research and professional practice in their disciplines UCA’s signature pedagogies are enshrined

in its creative education strategy offering a distinctive balance of conceptual and critical thinking skills and highly accomplished professional, production and making skills Creative practice is at the core of learning, teaching and assessment practice and the curriculum is designed to be holistic and inclusive, challenging and developmental Courses recognise the diversity of students and their needs so are designed to be inclusive in their support for learning

To support teaching staff in their reflective teaching practice, the newly formed Teaching and Learning Development team was formed in March 2019 The new team brings together teacher development and learning development within the newly formed department of Research and Education The team of educational developers now offer a range of educational enhancement tools to support quality teaching and are on hand to meet with course teams looking to address retention and achievement issues To support dispersed teaching and learning communities, the new Creative Education online resource is organised around the TEF categories (Teaching on my course, Assessment and feedback, Academic support, Continuation, Employment or Further Study, Highly skilled employment or further study) Each area now includes case studies, webinars, videos and inclusive teaching materials designed to help busy teaching teams put strategies

in place to address teaching and learning issues The team are currently working on the development of their core offer and a three-day course to introduce teaching staff to learning, teaching and assessment practice

Careers & Employability

The Careers & Employability team deliver a comprehensive range of inclusive services aimed at preparing students and recent graduates for professional success The last year has seen a strong focus on promoting internationalisation, inclusion and wellbeing

Effective and relevant employability events have been organised at all campuses jointly with academic course leaders and these have enabled students to engage with prospective creative industry employers and alumni

in discipline-specific contexts The highly successful ‘Creative Charge’ career and recruitment fair 2019, was delivered at Epsom jointly with the School of Fashion and was attended by 200+ students and brands including ASOS, River Island, White Stuff, Urban Outfitters, IBM, The Army and many more Popular events at Rochester included ‘Animate your Future,’ organised collaboratively with the Computer Animation Arts Course Leader and

a Fashion Design Careers day run with the FD course leader, which attracted graduates as well as current students Two ‘Design your Future’ events were delivered at Canterbury with Graphic Design and at Farnham,

a ‘Film Focus’ event offering specialist advice on getting into the film industry was organised with the BA Film Production programme A ‘Take-off’ careers event with industry-led Q&As was also successful

SPECTRA (standing for Skilled, Professional, Employable, Commercially Aware, Talented, Resilient, Adaptable) is an innovative programme of workshops and this year has included events on digital identity, freelancing, networking and the wider opportunities for creative graduates Themed weeks were also celebrated which complemented the embedded programme of career initiatives and included an ‘Emerging Artist Week’ at Canterbury Work on embedding careers and employability into the curriculum is progressing significantly across campuses

A new careers platform, Job Teaser, was launched and provides students with access to exclusive job vacancies in the UK and abroad, bespoke careers resources and the ability to book appointments with careers advisors A designated career online resource utilises social media networks, including a new UCA LinkedIn Alumni Network Group aimed at supporting alumni and recent graduates in their professional development One-to-one guidance is available through face-to-face appointments or online through Skype Current students also have access to a wide variety of online learning resources via the virtual learning environment (VLE) Mental health and wellbeing have been important themes with the organisation of workshops on confidence and careers resilience An outside speaker, Imogen Dell, author of the ‘Creative Breakdown Insurance’ zine visited each campus to discuss mental health and self-employment These events proved to be greatly appreciated by students Supporting the career development of UCA’s black, Asian and minority ethnic (BAME) students has also been a focus with the launch of a new partnership with Creative Access, an organisation based at ITV studios which works to support young people from BAME backgrounds to secure jobs and paid training in creative companies

The team has also been engaged in globalising the careers offer which has involved promoting international work experience and organising workshops aimed at helping international students and at understanding global markets The end of the year saw the team working with the new Head of Education and the Graduate Communications Officer on a UCA Graduate Professional Development Programme for launch in September

2019 The team’s move to Research and Education will provide further opportunities to integrate careers and employability into the curriculum and to enhance the student experience through an increased focus on key themes of internationalisation, inclusion and wellbeing

Internationalisation

The University is in the process of implementing an Internationalisation Strategy This is designed to enrich the on-campus and in-country (Transnational Education – TNE) experience for students and staff through greater staff and student mobility within our developing partner network, creating reciprocal, richer learning environments; and enhancing programmes through curriculum development adopting a global context Several TNE agreements were signed during 2017/18 for a 2018/19 start These range from progression agreements, articulation agreements and franchise of foundation programmes which lead to subsequent progression to the

UK, validation or franchise of UG and PG provision in-country Further discussions are underway with a range

of potential partners for a 2019/20 start We have already developed relationships with over 75 potential partners in more than 15 different countries, including China, India, Cyprus, Hong Kong, Pakistan, Singapore, Russia, Malaysia, Taiwan, Iceland and so on

Investment has been made into a new International Studies Department, responsible for international student recruitment and support, the development of international collaborative partnerships and the delivery of TNE projects overseas, the delivery of foundation programmes to international students in the UK, pre-sessional and in-sessional English language courses throughout the year, as well as staff and students mobility through Erasmus plus and international partnerships Consideration is being given not only to recruitment, but to the support required to ensure international students have a good experience – this includes through the creation

of the new Academic Plan in support of the new University Strategy which reinforces the critical importance of successful internationalisation of the University’s activities and culture The pattern of recruitment is spread across the University’s four campuses to ease requirement on space and accommodation

The University believes that creativity is stimulated by cultural diversity and that this is a necessary phase of its intellectual development over the next 10 years

Professional Recognition and Accreditation

The University has a portfolio of associations with professional, statutory and regulatory bodies These include: Broadcast Journalism Training Council (BJTC), Creative Skillset, British Kinematograph Sound and Television Society, CILECT, the British Academy of Film and Television Arts (BAFTA), Albert, the Higher Education Academy (HEA – see below), the Architects Registration Board (ARB) and the Royal Institute of British Architects (RIBA)

The University re-accredited its continuing professional development (CPD) provision for teaching staff with Advance HE in June 2018 Teaching staff can now undergo more flexible taught and experiential routes to teaching qualification and professional recognition through our new Creative Education Professional Development Framework To achieve a teaching qualification, academic staff are offered a fully funded place

on our PG Certificate in Creative Education The PGCert is offered as an online experience (rather than a day release model) to fit in with busy teaching schedules Our Creative Education CPD Scheme (D1-D3) provides

a route to professional recognition for all experienced teaching staff and now includes a new dialogue route, where a claimant submits a lite submission and is then invited for a dialogue with a specially convened professional recognition panel Since 2016, the University professional recognition scheme has supported over

140 teaching staff to gain teaching qualifications and/or professional recognition

Student Retention

The University uses the Annual Academic Monitoring (AAM) of courses and the production of the University Quality Report (HE) and the Self-Assessment Report (FE) to examine the student life cycle and track the performance of students across groups with protected characteristics, domiciles and level of study There is a longer time frame on the reporting of retention; the most recent complete dataset refers to the 2017/18 academic year In the last cycle, this analysis resulted in a BAME Achievement Group being established and a focused remit for the Student Access, Wellbeing and Inclusion Group to support stronger outcomes for students and address equality gaps This has resulted in formalised policies for induction and the development of induction activities and a new personal tutoring policy that will provide further support for the retention of students, with particular focus on students at HE level 4

On-course and individualised support for learners is at the heart of our retention strategy in two essential ways: through academic course teams and through Gateway Services (the physical and on-line services that support students) The retention of students has been largely consistent, with a 1% improvement in the largest, undergraduate group

• FE – 88% (89% retention in 2016/17)

• UG – 92% (91% retention in 2016/17)

• PG – 92% (equal to 2016/17 retention)

Data taken across the entire population (O/S and Home) at each level

The University uses the AAM of courses and the production of the University Quality Report to examine the student life cycle and track the performance of students across groups with protected characteristics In the last cycle, this analysis stimulated revisions to the terms of reference for our quality committees and identified actions for 2017-20 to support retention, achievement and employability of students The Quality Report also stimulated a strategic review of employability in 2017, recognising the need to review employability approaches

in the curriculum and within professional services to support stronger outcomes for students and address equality gaps Further initiatives emanating from the Quality Report include a review of the University Credit

Scheme to ensure assessment practice does not over penalise very small elements of failure when the learning outcomes for an early stage of learning have been met The University uses Quality Monitoring as a proactive means of changing practice across the University to support progression and success for all

On-course support for learners is at the heart of our retention strategy in two essential ways: through academic course teams, and through Gateway Services (the physical and on-line services that support students) The academic teams have responsibility for academic and pastoral support of students In creative arts education these often combine to provide the underpinning of highly individualised creative practice Recently the approach to providing tutorial provision was reviewed giving particular emphasis to ‘Induction Tutoring’ to ensure there is a higher level of tutorial support in the early phases of level 4 Providing sufficient on-course support, particularly pastoral support for learners with complex needs is one of the greatest challenges facing our academic communities Non-continuation of students continues to be a major factor in retention: 25% (87)

of all attrition at first degree level in 2016/17 was due to students not returning to studies in 2017/18 The factors contributing to this figure were explored in 2017/18 by the Student Success Committee and a substantial piece

of work on interruption and its impact on attrition is underway

Gateway Services act as the first point of contact for UCA students and staff seeking to access the integrated services and support delivered by Library & Student Services, covering Advice & Student Finance, Counselling Services, Careers & Employability, Disability & SpLD and Learning Services The Gateway campus teams specialise in answering enquiries and providing support both in person and online They respond to a wide range of questions and will triage queries and signpost enquirers to other UCA staff and services and/or to external organisations who can provide appropriate support

Student Outcomes

The graduating students of 2018/19 achieved well at 74%* of graduates achieving a First or Upper class degree This is one percentage point below 2017/18 graduates and on par with 2016/17 graduates This levelling out was anticipated as ‘good degrees’ increased in the years preceding this following introduction of cross parity exercises across the University, renewed focus upon a consistent grade band and improving entry profiles, formalised through the introduction of higher standard entry criteria in November 2015

Second-The University saw a significant increase in the number of 2016/17 graduates in graduate level employment six months after graduation: 74%, up 9 percentage points from the 2015/16 graduates This followed a

significant University wide project in 2016/17 and 2017/18 to review employability at UCA

* Provisional results, subject to HESA student return (31 October 2019) Actual figures available in

November 2019

Student Satisfaction

As a specialist creative arts institution, in competition with other specialists nationally and strong disciplinary universities regionally, UCA must provide its students with an outstanding experience, sustained industry engagement and excellent studio and workshop facilities, all supported by experienced technical and academic staff who need to be resourceful teachers and creative researcher practitioners This model of provision is replicated in differing forms across the four campuses at Canterbury, Epsom, Farnham and Rochester in order to ensure an appropriate and equitable experience for students The success of the provision has been demonstrated by the results of TEF 2019 In granting the prestigious ‘Gold’ award to UCA, the panel noted:

multi an institutional culture, which facilitates, recognises and rewards excellent teaching, embedded across the provider;

- outstanding levels of stretch that ensure all students are significantly challenged to achieve their full potential, including the use of assessment methods involving self, peer and tutor reflection for formative and summative feedback;

- the nature and design of the curriculum for ensuring a highly specialised professional, personal, supportive and immersive experience;

- an institutional strategy for employability embedded across all curricula, linked to project work and significant contact with employers that frequently engages students in developments from the forefront

of professional practice

This performance is echoed in the ranking of the University as the top creative specialist institution in all three national league tables, its 13th place amongst all UK universities in the Guardian University Guide 2020, and the award of ‘Modern University of the Year 2019’ by The Times and The Sunday Times Good University Guide UCA continues the practice of using internal student experience surveys for all year groups to support enhancement activities Results from these surveys have been largely consistent with previous years and it is positive to see year on year improvement of Postgraduate Research Students satisfaction that now stands at 85%

The National Student Survey (NSS) of Year 3 (as a measure of the overall satisfaction of our UG student body with the quality of their time at UCA, enabling direct sector comparisons) maintained at the level achieved in 2017/18 at 83% with an 87% response rate, in-line with sector average

Satisfaction varies from course to course and UCA has in place enhancement plans to bring about more consistent levels of satisfaction across all provision Further mechanisms are being introduced to ensure that courses not achieving targets have robust action plans in place, the implementation and effectiveness of which will be assessed throughout the year through a new Student Experience Board chaired by the Deputy Vice-Chancellor (Academic) Departments will also be asked to provide quality enhancement plans to the Academic Quality Committee for underperforming areas

Teaching Qualifications and CPD

The University continued its strong trajectory of professional recognition for teaching with qualification successes in 2017/18 40 UCA staff achieved HEA professional recognition at D1, D2 and D3 of the UK Professional Standards Framework (UKPSF) Of these, 28 came through the non-credit bearing units and 12 came through the credit bearing teacher qualification routes These results were a positive contribution to achieving the target of 60% of the teaching staff holding teaching qualifications More significantly, staff successes in these areas are enabling the development of more reflective cultures of teaching and learning across campuses, disciplines and professional boundaries

A full programme of CPD opportunities around teacher development has been offered to UCA staff from 2017 These are promoted via UCA Workplace and via the Creative Education wordpress site

applying for HEA Fellowship and various workshops and webinars on aspects of student engagement and inclusivity In addition, bespoke enhancement activities are offered to various academic teams, often focused around course quality process recommendations These included topics like BAME attainment, creative teaching, inclusive practice and assessment and feedback The Head of Teaching, Learning & Student Engagement also facilitated student engagement activities around Value for Money and developing the university strategy More recently, a successful Course Leader Development event around BAME attainment and a collaborative learning and teaching day for UCA and OCA colleagues were held

Research

The organisational context to Research support and direction in the University has changed considerably In January 2018 the Leadership Team gave its support for a new structure, creating a new department of Research and Education under a permanent full-time Director of Research and Education who commenced employment

on 1 August 2018 and oversees three teams: an Education team, a Research team and a Galleries team This new structure has been implemented in stages during 2018/19, with the Head of Education (who leads the Education team) joining the University in June Education teams that have moved from elsewhere in the University (Careers and Employability, Creative Education, Learning Development) are now in the new department, and a new Galleries staffing structure has also been achieved, as of summer 2019

During 2018/19 the Research Office has continued to deliver its core functions, directed to the support and leadership of staff research and research degrees Preparations for the Research Excellence Framework (REF)

2021 have been continued, with considerable efforts directed to the Academic Career Fields scheme This is

an integral part of REF planning, as it forms the basis for identifying which staff have ‘significant responsibility for research’ for the REF, and whose outputs will be submitted The Academic Career Fields scheme is the basis for UCA’s REF Code of Practice, which was submitted in June 2019 and has been approved subject to two requested clarifications 2018/19 saw training delivered for professors and readers in the review of REF outputs, and this process of review is now well underway Impact case studies have been identified and are in

development 2018/19 has also seen a process to recruit Professorial Fellows, bringing in to UCA highly experienced staff with excellent research achievements who can support and stimulate the research culture in each school As of September 2019, seven appointments have been made, due to start work in the coming term

The new research degrees partnership with UAL that was successfully implemented during 2017/18 has continued to work well during 2018/19 There has been a significant increase in Research Degree Applications, and 15 new students are due to start their studies in September 2019 Intensive preparations are now under way for UCA’s application for our own Research Degree Awarding Powers

Funding and Staff Research Achievements

The table below indicates the total amount of external funding awarded in 2018/19 (which will go through UCA finance processes) This amount may be awarded over the lifetime of the project and so the actual amount of external funds received by UCA in 2018/19 is also shown

There is a decrease of successful awards from the previous year (which was also boosted by inclusion of awards that went directly to researchers) but the new post of External Research Developer, who started in April

2019, will look to support researchers and UCA in applying and achieving successful bids

2018/19 2017/18 2016/17 2015/16 2014/15 2013/14

Total amount awarded* £149,869 £305,677 £775,010** £111,062 £500,500 £143,157

External grant funding received

into UCA project accounts £131,884

* Please note that funding from the National Collaborative Outreach Programme (NCOP) is included in this

total

** Please note the higher amount reflects the total number of bids from UCA staff including those that are

awarded directly to the researcher The amended number in brackets is the number of bids where funds will go through UCA finance

Included in the above table for 2018/19 is UCA’s successful participation in a bid led by Royal Holloway, University of London, to the Arts and Humanities Research Council’s (AHRC’s) Creative Industries Clusters programme UCA will derive £60,522 from this source over three years, contributing a match of £12,104 (20%)

in staff time and resources The project, known as StoryFutures, is one of just nine bids to receive funding from the AHRC programme, and will bring together universities and world leading creative and technology companies with the region’s small and medium-sized enterprises (SMEs) The project will tackle the challenge

of next-generation storytelling: how the creative sector will harness technologies including augmented, virtual, mixed and cross Reality (AR, VR, MR, XR), smart devices, and artificial intelligence to engage audiences in new experiences

Other staff research highlights during the year include the publication of books such as The Punishment of Luxury by the Vice-Chancellor, Professor Bashir Makhoul, to accompany his exhibition at the Umm el-Fahem

Art Gallery, Phytopia by Ed Chell to accompany his exhibition at Glynn Vivian Art Gallery, Ship to Shore: Art and the Lure of the Sea, by Professor Jean Wainwright, So to Speak by Steffi Klenz, BLINK, a new photobook

by Professor Anna Fox, Cheap Street: London’s street markets and the cultures of informality, c.1850–

1939 by Professor Victoria Kelley, and Encompassing Research, UCA’s School of Crafts and Design research

publication

Successful research symposiums during 2018/19 include Craft(ing) the Body at the Crafts Study Centre, run

by Professor Simon Olding and Professor Lesley Millar with a keynote from Catherine Harper, Professor of Textiles and Deputy Vice-Chancellor of University of Chichester; Spatial Mutuality organised by Dr Stephen

Connolly: Has Documentary Failed? organised by Dr Silke Panse with Documentary Now! at Birkbeck,

University of London and a new research collaboration between bookRoom and the Audio Research Cluster which resulted in the here.here concert series, curated by Emmanuelle Waeckerle and Dr Harry Whalley

Conferences included Sustainable Innovation 2019 | Road to 2030: Sustainability, Business Models, Innovation and Design, the 22nd International Conference run by Professor Martin Charter at the Business

School, and the first Experimental & Expanded Animation Conference, organised by Professor Nicky

Hamlyn

The Fast Forward: women in photography research project based at UCA continues its impactful work, and

offered workshops in Lagos, Nigeria and London and mentorship programmes developed for women photographers in West Africa and China

A research presentation on the Memory Tracks project (funded by the Consortium for Research Excellence,

Support and Training (CREST)) was held at The Health Foundry in London, delivering findings into the impact

of memorable songs connected to daily tasks to help those living with dementia, with a research team from UCA, Glyndwr University and Manchester Metropolitan University

From the Kitchen Table: Drew Gallery Projects 1984-90 was a major touring exhibition, organised by the

School of Fine Art and Photography, which brought together original and related works from the Drew Gallery Projects archive (gifted to and digitised by UCA) celebrating Sandra Drew’s visionary legacy to a whole new generation Other exhibitions include Women in Photography: A History of British Trailblazers at The

Lightbox, Woking, with images from Professors Anna Fox (Country Girls) and Karen Knorr (India Song) and 20 new and archival interviews from Professor Jean Wainwright, who also curated a major group exhibition,

Powerful Tides, bringing together the work of major artists, dead and living, around the theme of the sea, as

part of the celebrations for Chatham Dockyard’s 400-year anniversary Steffi Klenz exhibited Paradise can Make Itself Scarce in London, 30 years after the Fall of the Berlin Wall, and Amanda Couch created a

performance-presentation for the Wellcome Library Insights Series, continuing her ongoing research concerned with bodily processes

UCA acted as host for the 5th Annual European Sculpture Network ‘start19’, with keynote from Andrea

Gregson on the Afterlife of Objects, and Anthony Heywood was selected to exhibit his new sculpture series, Iconic Buildings at the Wells Contemporary at Wells Cathedral

Ed Thompson was shortlisted for the Sony World Photo Award, Professor Karen Knorr was selected for the RA Summer Exhibition, and Professor Anna Fox was honoured at the Royal Photographic Society Awards

UCA Professors, Readers and Lecturers continue to exhibit their work globally including Professor Ori Gersht

“La Fleur de l’art” in Paris, Andrew Kötting at Berlin Film Festival Critics Week, and Professor Karen Knorr in France, Austria and the USA

The above researchers have all received support from the University’s Research Fund, as well as drawing in external funding from a variety of funding bodies in the UK and Europe

Leading and Managing Change

The action plan which emerged from the last staff survey focused on three key areas – Effective Performance Management, Culture and Values, and Dignity and Respect and was endorsed by the Vice-Chancellor and championed by members of the Leadership Team Four principle UCA Values and associated behaviours have been developed in consultation with staff and work to embed these will be ongoing over the forthcoming academic year Significant focus was placed on the completion of staff appraisal with an overall completion rate in excess of 95%

All Academic staff at UCA are now aligned to one of three Academic Career Fields: Creative Education, Research or Professional Practice The aim of the Academic Career Fields is to provide clarity and equity for

all academic staff in those activities that they engage in to enhance the delivery of education at UCA The Academic Career Fields approach provides equivalent expectations, frameworks and support across several areas of enhancement, and is an important mechanism for workload planning and career progression and support

It is a particularly challenging time for the sector and UCA like many other universities faced significant term financial challenges A shortfall in undergraduate recruitment projected for 2019/20, together with unprecedented cost increases, mainly outside the University’s control, led to a projected saving requirement of c£5m being identified In light of the continued external pressures and year on year staffing and other cost increases, the University took action to address the short-term savings required to mitigate the impact on the University’s financial resilience In taking this action to deliver staff and other operating cost savings, the University has placed itself in the best possible position for projected growth from 2020/21

short-Reflecting and embedding learning

We continue to place emphasis on the development of our staff, equipping all staff with the capacity and capability to respond with agility to the constantly changing environment The culture of self-directed learning continues to gain momentum, supported by an increasing demand for bespoke programmes that tailor a range

of development opportunities to roles and individual staff HR works closely with the Leadership Team to ensure all development relates directly to University objectives The University was awarded the Staff Development Forum (SDF) Developing Excellent Practice Award 2018 for its commitment to implementing a strategic workplace learning framework that boosts individual, team and organisational performance ‘A whole systems

approach to staff Learning & Development at UCA’

Equality, Diversity and Inclusivity

The University has continued to promote equality, diversity and inclusion during 2018/19 including our on-going commitment to AccessAble, Stonewall (LGBT) and the Living Wage Dignity and respect workshops were held

on all campuses and an advocate scheme drafted to support and encourage the reporting and addressing of inappropriate behaviour Following the statutory publication of the Gender Pay Gap data, the University is

continuing to work to reduce the identified median pay gap, which stands at 6.8% as reported in March 2019, compared to 8.4% in the previously year Continued emphasis is being placed on supporting mental health, enhancing resilience and inclusive practice through the Mental Health First Aider training programmes

Financial Review

Summary Financial Statements to 31 July 2019

The Financial Statements for the year ended 31 July 2019 have been prepared to comply with the Statement

of Recommended Practice (2015 SORP) “Accounting for Further and Higher Education”

Presentation of the primary Financial Statements for the year to 31 July 2019 is summarised as follows:

2019 Restated 2018 £’000 £’000 Extracts from Consolidated Statement of Comprehensive Income

Total income has increased by £3.7m, an increase of 6% Tuition fee income has increased by £4.2m, which includes £1.9m of tuition fee income from OCA In the main, the increase in tuition fee income is attributed to HE/PG Overseas students (54%)

Total expenditure increased by £3.5m, an increase of 6% The increase in expenditure is predominantly in staff costs (up by £2.1m), which includes restructuring costs of £1.2m, the annual pay award of 2.0% with a minimum

of £425 for spine points 2 to 15 and incremental pay increases FRS 102 defined benefit pension accounting adjustments (non-cash) account for ‘current and past service costs’ of £2.7m and £735k (2018: £882k) interest costs during the year

A small deficit of £257k, after accounting for the FRS 102 pension adjustments above, was achieved through tight cost control, supported by Value for Money initiatives These disciplines will continue to be important for the years ahead

Financial Strategy

The Financial Strategy has continued to aim for a resilient financial position that supports the University’s core activities, and which assists strategic development The strategy focuses on increasing income and maximising efficiency to achieve and exceed a net cash inflow from operating activities of 8.0% in future years The Strategy targets annual capital investment of at least 2.5% of the Reinstatement Value of the estate

Key Performance Indicators (KPIs)

A number of financial and non-financial KPIs have been identified by the Board of Governors and are reported

to it on a quarterly basis The values for the financial KPIs are shown below

The Board pays particular attention to cash-related Performance Indicators (highlighted in the table below), where comparisons can be drawn across the sector

2019 2018

Current assets as a percentage of current

liabilities (‘current ratio’) 148 152

External borrowing as a percentage of total

Surplus for the year as a percentage of total income -0.39 -0.74

Unrestricted reserves as a percentage of total income 51.8 72.2

Total net assets as a percentage of total income 52.4 72.8

Staff costs as a percentage of total income

(excluding restructuring costs of £1,174k, 2018:

Cash generated from operating activities as a

Cash generated from operating activities during the

Pension Costs and Liabilities

Annually, the University considers and agrees the assumptions used by the Actuaries to calculate the University's pension costs and liabilities in accordance with the requirements of Financial Reporting Standard

102 (FRS 102) and these are reported in Note 23 of these Financial Statements This year the assumptions include an adjustment for the “McCloud” judgement, resulting in an increase in past service costs of £285k The Actuaries have calculated the University's long-term pension liabilities in the context of FRS 102 at 31 July 2019

as £39,167k (2018: £25,182k); the increase is primarily a result of actuarial losses in both the Surrey and Kent Local Government Pension Schemes

Managing Risks and Uncertainty

The funding environment in the last six years has become more uncertain for all universities The changes in the HE funding regime that took place in 2012/13, when relatively predictable levels of government-funded grants were replaced by student tuition fees, have had an effect on patterns of student recruitment across the

HE sector At the same time, the removal of the student numbers cap and the fall in the number of young people

in the UK has intensified the competition between universities For UCA, where some 19% of students are on

FE courses, the impact of these changes has been compounded by recent adjustments to the Education & Skills Funding Agency (ESFA) methodology and the material reduction in the ESFA grant

In the short to medium term, the risk continues that public capital funding of higher education will continue to

be constrained and that the tuition fees charged to students will be affected by the recommendations in the Augar review of post 18 education and funding The referendum decision in June 2016 for the UK to exit the European Union has not yet affected our activities but has implications for future EU enrolments dependent in part on government policy

The biggest risk for the University emanating from these changes and uncertainties is the reduction, over time,

in the University’s Home/EU student population leading to more volatile fee income On the expenditure side, increasing pension fund deficits are forcing employers to address the funding gaps leading to upward pressure

on costs The University is dependent on its capacity to generate sufficient surpluses on teaching and other income streams to invest adequately in infrastructure, to enhance teaching and research and to address previous under-investment

The University continues to manage risk pro-actively, shaping strategy and policy in anticipation of and response to the external environment The University’s Risk Register is maintained by the Strategic Risk

Management Group reporting to the University Executive Group and Leadership Team and reviewed by the Audit & Risk Committee through an on-going process of risk analysis, in line with the University’s Risk Management Policy

To address our primary risks the University has diversified its target markets by increasing numbers of graduate and overseas students and by expanding its portfolio to encompass business studies subjects The University opened its Business School for the Creative Industries in 2017, the first of its kind in the UK Alongside this, we have embarked on an extensive partnership programme with colleges throughout the country

post-to secure the pipeline of home undergraduates Advancing the international agenda remains a post-top priority for the University The institutional strategy is to secure growth in overseas students and transnational education programmes through the extension of collaborative arrangements with overseas institutions

These approaches are complemented by the extension of market reach through joint development of distance, blended and on-line learning techniques with our subsidiary OCA targeting both UK and international recruitment

Keeping a focus on quality is equally important The University is intent on maintaining and, where possible, improving all quality metrics, including those in the TEF Improving graduate employability, is a key objective and the University is pleased with the recent improvements to this in 2019

Continuing investment in infrastructure is vital to the University in ensuring attractiveness to domestic and overseas students and thus long-term sustainability in an increasingly competitive market The University’s Capital Investment Programme has resulted in the draw down of the £9m term loan The full borrowing facility

of £20m falls within bank covenants and is not considered to be a significant institutional risk The University is exploring alternative sources of funding capital projects in addition to public funding and bank facilities The most recent example is the adoption of an ‘income strip’ (sale and lease back) solution to fund new student residences at Farnham

Going Concern

The activities of the Group and the University, together with the factors and risks likely to affect its future development and performance, are set out in the Strategic Report The financial position of the Group and the University, its cashflow, liquidity and borrowings are described in the Financial Statements and accompanying Notes

The University currently has a £9m sterling money market facility used for capital expenditure on teaching facilities and office accommodation, repayable by 31 July 2026 Additionally, there is a £11m sterling revolving credit facility available for working capital until 1 August 2022 The University also has approval for a £100k overdraft facility The University is concluding arrangements to fund additional student accommodation on its Farnham campus to accommodate 252 students It is anticipated that the funding costs will be provided through

an “income strip” arrangement whereby part of the income will fund the annual rentals once the accommodation

is occupied The costs of completing this accommodation is expected to be funded by an institutional investor The future financial success of the University depends on its ability to maintain and improve its student recruitment and retention numbers in a changing marketplace Given these uncertainties, the University regularly updates its financial forecasts and projections, which extend over a five-year period in accordance with Office for Students requirements Currently, these forecasts indicate that it will be able to operate within existing facilities and their covenants over this period

Accordingly, the University has a reasonable expectation that it has adequate resources to continue in operational existence for the foreseeable future, and for this reason will continue to adopt the going concern basis in the preparation of its Financial Statements

Conclusion

The Board of Governors is content with the financial outturn and satisfied that, although the University has realised a modest deficit, it has nonetheless improved against its original budget This is particularly gratifying considering the exceptional costs relating to the organisational re-structure The work we have undertaken to review our staffing structures to make them more efficient and effective will, in future, support the continued financial health of the University whilst meeting students’ needs and expectations in this changing landscape

On this basis, the Board has approved a plan to return to surplus in 2019/20 which aligns with the academic strategy and combines overseas student recruitment activity and TNE developments with further operating efficiencies The University’s medium-term financial forecasts show an increasing level of operating surplus The Board of Governors is particularly pleased with the academic and student achievements throughout the year that have culminated in the University being awarded TEF Gold and positioned as the highest ranked creative specialist institution in all three major national league tables, following the Sunday Times naming UCA

as Modern University of the Year 2019 Once again, the Board wishes to express its thanks for the dedication and hard work of all staff, without whom these successes could not have been achieved

Pauline Waterhouse OBE

Deputy Chair of the Board of Governors

Board of Governors

Independent

Pauline Waterhouse OBE (Deputy Chair)

Patrick Bradley

Professor Marie Conte-Helm OBE

Dr Stephen Hampson Appointed 1 August 2019

Tim Savage (Staff) Appointed 1 August 2018

Vice-Chancellor

Professor Bashir Makhoul

Academic Board Nominee

Professor Colin Holden Retired 31 July 2019

Professor Terry Perk Appointed 1 August 2019

Student Governors

Annie Durwood Appointed 1 July 2018; Resigned 30 June 2019

Callum Mitchell Appointed 1 October 2019

Marta Szurmiej Appointed 1 July 2018; Retired 30 June 2019

Katie Taylor Appointed 1 July 2019; Resigned 30 September 2019

Grant Thornton UK LLP, 30 Finsbury Square, London, EC2A 1AG

Professional Advisors – Solicitors:

Eversheds Sutherland LLP, One Wood Street, London, EC2V 7WS

Responsibilities and Corporate Governance Statement

In accordance with the Education Reform Act 1988, the Governing Body of the University for the Creative Arts Higher Education Corporation is responsible for the administration and management of the affairs of the University

These responsibilities are set out fully in the Articles of Government and are summarised in the Statement of Primary Responsibilities as:

• To approve the mission and strategic vision of the institution, long-term academic and business plans and key performance indicators, and to ensure that these meet the interests of stakeholders

• To delegate authority to the Vice-Chancellor for the academic, corporate, financial, estate and human resource management of the institution, and to establish and keep under regular review the policies, procedures and limits within such management functions as shall be undertaken by and under the authority of the Vice-Chancellor

• To ensure the establishment and monitoring of systems of control and accountability, including financial and operational controls and risk assessment, and procedures of handling internal grievances and for managing conflicts of interest

• To ensure processes are in place to monitor and evaluate the performance and effectiveness of the institution against the plans and approved key performance indicators, which should be, where possible and appropriate, benchmarked against other comparable institutions

• To establish processes to monitor and evaluate the performance and effectiveness of the governing body itself

• To conduct its business in accordance with best practice in higher education corporate governance and with the principles of public life drawn up by the committee on Standards in Public Life

• To safeguard the good name and values of the institution

• To appoint the Vice-Chancellor and Deputy Vice-Chancellors and to put in place suitable arrangements for monitoring their performance

• To appoint a Clerk to the governing body and to put in place suitable arrangements for monitoring his/her performance and to ensure that, if the person appointed has managerial responsibilities in the institution, there is an appropriate separation of the lines of accountability

• To be the employing authority for all staff in the institution and to be responsible for establishing a human resources strategy

• To be the principal financial and business authority of the institution, to ensure that proper books of account are kept and to approve the annual budget and financial statements

• To have overall responsibility for the institution’s assets, property and estate and be responsible for establishing an estate strategy

• To be the institution’s legal authority and, as such, to ensure that systems are in place for meeting all the institution’s legal obligations, including those arising from contracts and other legal commitments made

in the institution’s name

• To make such provision as it thinks fit for the general welfare of students, in consultation with the Academic Board

• To act as trustee for any property, legacy, endowment, bequest or gift in support of the work and welfare

of the institution

• To ensure that the institution’s constitution is followed at all times and the appropriate advice is available

to enable this to happen

Responsibilities of the Board of Governors

The Governing Body is required to present audited financial statements for each financial year and is responsible for keeping proper accounting records, which disclose with reasonable accuracy, at any time, the financial position of the University Group and enable it to ensure that the financial statements are prepared in accordance with the University’s Charter of Incorporation, the Statement of Recommended Practice (SORP 2015) “Accounting for Further and Higher Education” and other relevant Accounting Standards In addition, within the Office for Students (OfS)’ Terms and Conditions of Funding for Higher Education Institutions, the University is required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the University Group and of the surplus or deficit and cash flows for that year

When preparing the financial statements, the Board of Governors ensures that:

• suitable accounting policies are selected and applied consistently;

• judgements and estimates are made that are reasonable and prudent;

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

• financial statements are prepared on the going concern basis unless it is inappropriate to presume that the University will continue in operation The Board of Governors is satisfied that the University has adequate resources to continue in operation for the foreseeable future: for this reason the going concern basis continues to be adopted in the preparation of the financial statements

The Board of Governors has taken reasonable steps to:

• ensure that funds from the Higher Education Funding Council for England (HEFCE), the OfS, Research England and the Education and Skills Funding Agency (ESFA) are used only for the purposes for which they have been given and in accordance with the Memorandum of Assurance and Accountability with HEFCE, the OfS’ Terms and Conditions of Funding for Higher Education Institutions, the Terms and Conditions of Research England Grant, the Funding Agreements with the ESFA, and any other conditions which these funding bodies may from time to time prescribe;

• ensure that there are appropriate financial and management controls in place to safeguard public funds and funds from other sources;

• safeguard the assets of the University and the prevention and detection of fraud, bribery and other irregularities;

• secure the economical, efficient and effective management of the University’s resources and expenditure

Corporate Governance

Principles and ethos of the University

The University endeavours to conduct its business in accordance with the seven principles identified by the Committee on Standards in Public Life (selflessness, integrity, objectivity, accountability, openness, honesty and leadership), and with the guidance to institutions of higher education which has been provided by the Committee of University Chairs (CUC) in its Higher Education Code of Governance, published in December

2014 and revised in June 2018 A Register of Interests of governors and senior managers is regularly

maintained

Constitution and structural organisation

The University is an independent corporation, established as a Higher Education Corporation under the terms

of the Education Reform Act 1988 and the Further and Higher Education Act 1992 It is also an exempt charity under the Charities Act 2011 The University’s objects, powers and framework of governance are set out in the Articles of Government which were approved by the Board of Governors of the predecessor institution on 8 November 1995 Amendments to the Articles were approved by the Privy Council on 22 July 2005, on 26 July

2006, on 13 May 2008, on 16 August 2012 and on 8 August 2014

The University’s Board of Governors comprises 22 members appointed under the Instrument and Articles of Government of the University, the majority of whom are non-executive The Board conducted a review of its effectiveness in 2017/18 in accordance with the Effectiveness Framework approved in October 2006 It concluded that the outcomes of the review provide appropriate confidence that the Board’s responsibilities are being appropriately fulfilled

The matters specifically reserved to the Board for decision are set out in the Articles of Government of the University The Board holds to itself the responsibilities for the on-going strategic direction of the University, approval of annual estimates of income and expenditure, ensuring the solvency of the University and the safeguarding of its assets

The Clerk is appointed under the Articles of Government to act as Secretary to the Board and its committees The Board of Governors normally meets four times a year and conducts its business through four committees: Audit & Risk, Employment & Finance, Remuneration and Nominations Each of these Committees is formally constituted with terms of reference and comprises mainly lay members of the Board The Chairman of the Board

is a member of the Remuneration and Nominations Committees

The Audit & Risk Committee meets at least four times a year and comprises of lay members of the Board and

a co-opted member, none of whom serves on the Employment & Finance Committee The University’s internal and external auditors are in attendance and, although Senior Officers of the University also attend committee meetings, the members meet the auditors without the officers present immediately before each committee meeting The Committee considers detailed reports from the auditors, which include recommendations for the improvement of the University’s systems of internal control, together with management responses and implementation plans It also receives and considers guidance from the OfS through the Audit Code of Practice

as it affects the University’s business and monitors adherence to the regulatory framework Amongst its responsibilities it keeps under review the effectiveness of the risk management arrangements and provides an opinion on the adequacy of the management and quality assurance of data submitted to the Higher Education Statistics Agency (HESA), the Student Loans Company, HEFCE, the OfS, Research England, ESFA and other bodies The Committee scrutinises the annual statement of compliance for the Research Concordat and receives an annual report on donations made to the University, as well as considering the annual report for the Prevent Duty and the annual Modern Slavery and Human Trafficking Statement in draft before recommending their approval to the Board

The Internal and External Auditors have direct access to the Chair of the Board of Governors, the Chair of the Audit & Risk Committee and the Vice-Chancellor at any time

The Employment & Finance Committee meets at least four times a year It reviews, on behalf of the Board, the annual revenue, capital and cash flow budgets and monitors performance in relation to the approved budgets through the management and annual accounts As per expectations set out in the CUC’s HE Code of Governance, on a risk-led basis the Committee advises the Board of Governors on reputational or financial implications of proposed partnerships or collaborations It considers and approves the University’s Equality & Diversity action plan in addition to monitoring its progress The Committee advises the Board on the remuneration and terms and conditions of all staff, with the exception of the holders of senior posts, as defined

in the Articles of Government

The Remuneration Committee determines the remuneration of the holders of senior posts and monitors their performance In 2018/19 these were the Vice-Chancellor, Deputy Vice-Chancellors, University Secretary and Clerk to the Board of Governors

The Nominations Committee considers nominations for all vacancies for members of the Board of Governors under the appropriate Articles of Government and has responsibility for seeking and considering nominations

for the University’s Chancellor and recommending an appointment to the Board of Governors In line with expectations of the CUC’s HE Code of Governance, the University has made explicit its commitment to Equality and Diversity in its recruitment practices and literature, in order to appoint governors who will represent its diverse student population.

The Board of Governors has ensured that a properly constituted Board of Trustees exists for OCA, the University’s wholly-owned subsidiary, and the former approves appointments to the latter on the recommendation of Nominations Committee UCA’s Board of Governors is responsible for approving OCA’s strategic direction, and its Employment & Finance Committee receives financial reports in respect of the College Reports on OCA risks are received by its Board of Trustees, which provides an annual statement of assurance to the Audit & Risk Committee; in the period of report the College was encompassed by the University’s internal audit programme

Internal control

The Board of Governors has responsibility 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, in accordance with the responsibilities assigned to the governing body in the Instrument and Articles of Government and the OfS’ Terms and Conditions of Funding for Higher Education Institutions, and the Terms and Conditions of Research England Grant

This system is based on an on-going process designed to identify the principal risks to the achievement of the University’s aims and objectives; to evaluate the likelihood and impact of those risks; and to manage them efficiently, effectively and economically This process has been in place for the year ended 31 July 2019 and

up to the date of approval of the financial statements and accords with OfS guidance

The key elements of the University's systems of risk management and internal control, which are designed to discharge the responsibilities set out above, include the following:

• oversight of risk management by the Leadership Team;

• annual review of the University’s Risk Management Policy & Strategy by the Audit & Risk Committee;

• annual review of risk management effectiveness and risk appetite by the Audit & Risk Committee and the Board of Governors;

• the integration of risk management into the annual planning cycle of the University covering all business, operational, financial and compliance risks This process is informed by detailed annual income, expenditure, capital and cash flow budgets;

• the maintenance of an institutional Risk Register which is updated annually in accordance with the Strategic Plan and assessed on a quarterly basis The Register includes an evaluation of the likelihood and impact of risks, and identifies mitigation measures;

• a Risk Management Group, reporting to the Leadership Team, that keeps the Risk Register under review, adding new risks where necessary and monitoring the status of current risks against progress with the action plans;

• clear definitions of the responsibilities and delegated authority of heads of academic and administrative departments including responsibility for identifying and managing operational risks at a departmental level and escalating significant risk to the Risk Management Group;

• regular reviews of key performance indicators and quarterly reviews of financial results involving variance reporting and updates of forecast out-turns;

• clearly defined and formalised requirements for approval and control of expenditure, with investment decisions involving capital or revenue expenditure being subject to formal detailed appraisal and review according to approval levels set by the Board of Governors;

• comprehensive financial regulations, detailing financial controls and procedures, recommended to the Board of Governors by the Audit & Risk Committee in consultation with the Employment & Finance Committee

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness

The Board of Governors has responsibility for reviewing the effectiveness of the systems of risk management and internal control The following processes have been established:

• the Board meets at regular intervals to consider the plans and strategic direction of the University;

• the Audit & Risk Committee, through its consideration of the Risk Register at each meeting, provides oversight of the risk management process and requires regular reports from the University’s management

on the steps being taken to manage risks, including progress reports on key risks, systems for identifying significant risks facing the University, identifying actions required to minimise risk and regularly evaluating risks, using key risk and performance indicators;

• a professional Internal Audit team, whose annual programme is risk-based and approved by the Audit & Risk Committee, reports regularly to Audit & Risk Committee on specific areas of internal control, which include an independent opinion on the adequacy of the effectiveness of the University’s systems of internal control together with recommendations for improvement;

• management makes regular reports and presentations to the Audit & Risk Committee on internal control and risk mitigation actions;

• the Chair of the Audit & Risk Committee reports to the Board at each meeting on the status of the Risk Register and the findings of the Internal Audit Team

The Governing Body’s review of the effectiveness of the system of internal control was informed during the year

by the Internal Auditors, BDO LLP, who operate to standards defined in the OfS Audit Code of Practice The Internal Auditors provide the Board of Governors with an annual report, which provides an independent opinion

on the adequacy and effectiveness of the University’s system of internal control with recommendations for improvement The Board’s review is also informed by the work of the senior managers within the University, who have responsibility for the development and maintenance of the internal control framework, and by comments made by the External Auditors, Grant Thornton, in their Management Letter and other reports In the opinion of Governing Body there were no significant internal control weaknesses or failures arising during the year ended 31 July 2019 and up to the date of approval of the financial statements

Signed _ Signed

26 November 2019 26 November 2019

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF GOVERNORS OF UNIVERSITY FOR THE CREATIVE ARTS

Opinion

We have audited the financial statements of University for the Creative Arts (the ‘university') and its

subsidiaries (the 'group') for the year ended 31 July 2019, which comprise the consolidated and university statements of comprehensive income and expenditure, the consolidated and university balance sheets, the consolidated and university statements of cash flows, the consolidated and university statements of changes

in reserves, the statement of principal accounting policies and notes to the financial statements The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom

Accounting Standards including Financial Reporting Standard 102 ‘The Financial Reporting Standard

applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice)

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 university's income and expenditure, gains and losses, changes in reserves and cash flows for the year then ended; and

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice and the Statement of Recommended Practice: Accounting for Further and Higher Education published in March 2014

Basis for opinion

We have been appointed as auditor under the Education Reform Act 1988 and report in accordance with the requirements of that Act We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law Our responsibilities under those standards are further described in the

‘Auditor’s responsibilities for the audit of the financial statements’ section of our report We are independent of the group and university in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our opinion

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the Board of Governors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

• the Board of Governors has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the university’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial

statements are authorised for issue

Other information

The Board of Governors is responsible for the other information The other information comprises the

information included in the annual report, other than the financial statements and our auditor’s report thereon

Our opinion on the financial statements does not cover the other information and, except to the extent

otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon

In connection with our audit of the financial statements, our responsibility is to read the other information and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact

We have nothing to report in this regard

Opinion on other matters prescribed by the Office for Student’s (‘OfS’) Terms and conditions of funding for higher education institutions (issued March 2018) and the OfS’s accounts direction

(issued June 2018)

In our opinion, in all material respects:

• funds from whatever source administered by the university for specific purposes have been properly applied to those purposes and managed in accordance with the relevant legislation;

• funds provided by the OfS and Research England have been applied in accordance with the relevant terms and conditions, and any other terms and conditions attached to them, and

• the requirements of the OfS’s accounts direction (issued June 2018) have been met

Responsibilities of the Board of Governors for the financial statements

As explained more fully in the Responsibilities of the Board of Governors set out on page 22, the Board of Governors is responsible for the preparation of the financial statements and for being satisfied they give a true and fair view, and for such internal control as the Board of Governors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error

In preparing the financial statements, the Board of Governors is responsible for assessing the group’s and the university’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Board of Governors either intends to liquidate the group or the university or to cease operations, or has no realistic alternative but to do so

Auditor’s responsibilities for the audit of the financial statements

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 an auditor’s report that includes our opinion Reasonable assurance is a high level of assurance but is not a 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities This description forms part of our auditor’s report

Use of our report

This report is made solely to the university's Board of Governors, as a body, in accordance with the terms of our engagement letter dated 25 March 2019 Our audit work has been undertaken so that we might state to the university's Board of Governors those matters we are required to state to it 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 university's Board of Governors as a body, for our audit work, for this report,

or for the opinions we have formed

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

November 2019

Financial Statements

Consolidated and University Statement of Comprehensive Income

For the year ended 31 July 2019

2019 Restated 2018

Group University Group University

Note £'000 £'000 £'000 £'000

Tuition fees and education contracts 2 48,690 46,790 44,445 42,860

Actuarial (loss)/gain in respect of pension

Total comprehensive (expenditure)/income

for the year (10,773) (10,922) 8,960 8,924

The income and expenditure of the Group relates wholly to continuing operations

The notes on pages 32 to 58 form part of the financial statements