annual report andfinancial statementsfor the year ending 31 July 2012

annual report andfinancial statements

for the year ending 31 July 2012

VISION

To be recognised as a modern civic university delivering solutions to the challenges of the 21st century

MISSION

Our mission is to create and sustain a vibrant community forlearning and knowledge where staff and students work togetherin an active and supportive partnership; providing opportunities to

enrich our students, partners and wider society through education, training, research, scholarship and knowledge transfer.

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Liverpool John Moores University

An introduction from the Vice-Chancellor

Introduction 2011/12

The Financial Statements for the year ended 31 July 2012 represents another strong financialperformance for the University. This sits alongside a successful academic year as measured byour student recruitment and improved National Student Survey (NSS) and league table positions.

A new Strategic Framework has been agreed that will steer the University over the next fiveyears from 2012 to 2017. The University's ambitious plan is underpinned by a commitment tobe seen as a modern civic university delivering solutions to the challenges of the 21st century.

The higher education sector is presently in a period of considerable change. However, our clearstrategy, together with our underlying financial strength, gives the University confidence tomeet these challenges.

The Balance Sheet has maintained its strength; income and expenditure reserves are showinga significant increase compared with the previous year.

We have continued to invest in our key areas of activity with the purpose of enhancing thestudent experience and developing as a University that embeds scholarship in everything wedo. Of particular relevance has been the major investment in new staff over the last year thathas attracted internationally recognised scholars from around the world to the University.

I appreciate that the success of the University is dependent upon the hard work of staff acrossthe Institution. I would like to take this opportunity to thank them all for their hard work anddedication. These are uncertain times, but the University is clear on its mission, and its clarityof purpose will enable it to emerge as a stronger institution.

Professor Nigel P WeatherillVice-Chancellor and Chief Executive

Professor Nigel Weatherill

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About Liverpool JohnMoores University...

...In 1825, a small institution was founded that wasto revolutionise education in Liverpool andprovide opportunities for the working people ofthe city. The Liverpool Mechanics School of Artwas founded by men of power and influence whorecognised the transformative effects of educationand the impact that learning and aspiration couldhave on individuals, on communities and society.

This small, pioneering movement laid thefoundations for Liverpool John Moores University,an institution that has grown and flourished andcontinues to provide opportunities for all.

It is an ethos we characterise in the simple words– dream, plan, achieve – from a statement madeby our namesake Sir John Moores, the founder ofthe Littlewoods empire and a beacon of equalopportunities in Liverpool, “... if you want toenough, you can achieve anything”.

Building on this educational heritage, LJMU is nowone of the UK’s leading contemporaryuniversities, delivering exceptional teaching andlearning underpinned by high quality research andcommercial engagement.


at a glancen Annual turnover is £170.4m

(2011/2012)

n Expenditure £165.4m (2011/2012)

n Underlying operational surplus £4.9m (2011/2012)

n 24,456 students

n 2,933 staff

n 250+ courses at undergraduateand postgraduate level

The University continues to attractstudents from a wide range ofbackgrounds and countries around theworld. LJMU successfully met itsundergraduate recruitment targets forthe 2012/2013 academic year.

Academic

echnical TTechnical

Adminstrative

Research

Manual

Staff Breakdown

45%

6%

36%

7%6%

3

4

LJMU is organised into five academic Faculties with supportingprofessional services. We are based in two clusters in the citycentre with one outlying greenfield campus.


University Structure

City Campus

Mount Pleasant Campus

IM Marsh Campus

Regardless of the discipline studied, all programmesemphasise the development of professional skillsand competencies underpinned by sound theoreticaland cutting-edge research.

City CampusCity Campus supports students enrolled on a widerange of undergraduate and postgraduateprogrammes covering pharmacy, psychology, sportsscience, engineering, the built environment, computerscience, maritime studies, nursing, midwifery, socialwork and much much more.

Mount Pleasant Campus(Liverpool Knowledge Quarter)The Mount Pleasant Campus supports studentsenrolled on a wide range of undergraduate andpostgraduate programmes covering law andcriminology, business, art and design, humanities andsocial sciences, drama and creative writing, media,journalism and film studies.

IM Marsh CampusIM Marsh Campus supports students enrolled onundergraduate and postgraduate programmes inteacher training, vocational education, educationstudies, tourism, events management, food, sport,dance, outdoor education and professionaldevelopment. This is the only LJMU campus notlocated in Liverpool city centre.

Total number of students: 24,456 19,803.8 FTE (2011/2012)

% of % ofLJMU LJMU

Total FTE Total FTE

Arts Professional and Social Sciences 8091 7223.6 33.1 36.5

Education, Community and Leisure 3168 2717.7 13 13.7

Health and Applied Social Sciences 4216 2214.6 17.2 11.2

Science 4465 3865.9 18.3 19.5

Technology and Environment 4516 3782.1 18.5 19.1

Student Statistics

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9%

88%

3%

46% 54% 42%58%

80%

7%13% 6%

94%

15% 2%

84%

46% 54% 77%23%

69%

6%10%

10%

5%

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Establishing and enhancing the

student partnership

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at a glanceNational Student Survey2012 results:n 35 programmes secured

overall satisfaction rates of 90% or above

n Assessment and feedback: student satisfaction increasedby 7% to 73%, 3% above the sector average

n Academic support: student satisfaction increased by 6% to 80%, above the sector average by 1%

n Learning Resources: up 5% to 86% and LJMU is now outperforming the sector by 4%

n Personal Development: increased by 1% to 81%, equal to the sector average

LJMU is committed to effective student representationacross the University, from programme level to theBoard of Governors, with student views being activelysought informally and via course representatives,student surveys and the election of student sabbaticalofficers in the Liverpool Students’ Union.

Overall satisfaction with the LJMU learning experience,as recorded in the National Student Survey (NSS), hasrisen by 3% for the second year running; with 83% offinal year students stating they were satisfied with theoverall quality of their course. Similar results wereachieved in the LJMU Survey, which mirrors the NSS,with 81% of Level 4 and 5 undergraduates saying theywere also satisfied with their course.

“LiverpoolSU wants LJMU tobe the best, and to do what weneed to help create a culturewhere amazing teaching ispursued relentlessly and celebrated endlessly.”Paul Abernathy, President of the Liverpool Students’ Union

LJMU awards scholarshipsand bursaries worth£7million every year

Every student is assigned aPersonal Tutor

LJMU delivers sector-leadingsupport for students who havebeen in local authority care orwho are estranged from theirparents thanks to our JohnLennon Imagine Awards,established with support fromthe Yoko Ono Spirit Foundation.


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Excellence inteaching, learning and assessment

“The LJMU Racing Teamhas transformed itstraditional ‘lecture-tutorial-laboratory’ programmedelivery into an innovative,problem-solving approachwhich centres on real-lifeapplications and industry-led design projects.”The LJMU Formula Student Racing Team, winnerof an LJMU Teaching and Learning Award

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Preparing future generationsto deliver solutions to thechallenges of the 21st century

Currently ranked 66 in the UK by the SundayTimes Good University Guide, LJMU deliversan exceptional student experience, foundedon high quality teaching, ground-breakingresearch and extensive links with employersand business leaders. It’s this combination ofacademic expertise and ‘real world’experience that helps ensure that ourdegrees are kept up-to-date and secureaccreditation by key professional bodies.

Every year students nominate staff for theLiverpool Students’ Union TeachingExcellence Awards and the nominationsprove that inspiring teaching and learnersupport is at the heart of the LJMU studentexperience.

6 National TeachingFellowships or 'AcademicOscars' from the HigherEducation Academy inrecognition of ouroutstanding teaching andlearner support

Extensive portfolio ofundergraduate degrees,postgraduate taught coursesand research opportunities

LJMU research directlyinforms all areas of thecurriculum

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Boosting graduateemployabilityOur unique World of Work programme has beendeveloped in partnership with FTSE 100 companiesand leading business organisations. The programmeensures that all our undergraduates develop theexperience, attributes and skills demanded by today’semployers in all sectors of the economy.

The World of Work Programme is integral to all ourundergraduate courses and consists of three inter-related elements: graduate skills, which are taught,practised and assessed as part of our academicmodules; work-related learning and an additional Worldof Work Skills Certificate, only awarded to studentswho pass a ‘mock’ graduate-entry level interviewconducted by an employer from their preferred sector.

n The British Council regards the World of Work Programme as a ‘best practice’ approach to employability for universities worldwide.

n Successful World of Work pilot programme completed with Malaysia’s largest public university.

“ The World of WorkProgramme will giveLJMU students thecompetitive edge thatno other university willgive them.”Lindsey Fryer, Tate Liverpool

“ The World of Workprogramme is a uniqueformula to makegraduates employable.”Dr Norsaadah Ismail, Director IndustryRelations Division, Malaysian Ministryof Higher Education

GraduatedestinationsFor the third year in succession, LJMU has improved itsoverall graduate employment rates, with more studentsthan ever securing prestigious graduate-entry positions.This positive trend is set against a backdrop of risinggraduate unemployment and increasing competitionwithin a very challenging labour market.

n The average salary for all LJMU graduates was £19,000, which was higher than the UK average of £16,700.

n The average salary for students in graduate-level roles was £22,900, compared to a national average of £19,400.

n Over 90% of graduates are in work or further study since months after leaving the University

n 54% of students secure graduate-entry professional jobs

n Unemployment rates for LJMU graduates declined to just over 2%

n Approximately 60% of graduates work in Merseyside

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LJMU is currently one of the leadingresearch-active contemporary universities inthe UK. The 2008 Research AssessmentExercise confirmed that we conduct world-leading and internationally-excellent researchquality right across the Institution, and theimpact of our research in physics washighlighted in 2011 as best practice in theResearch Excellence Framework (REF) pilot.

Embedding researchand scholarshipOur ResearchInstitutes are beaconsof excellence providinginspiration andmotivation to staff,students and society.

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The range of research conducted at LJMUis considerable. From developing cuttingedge new technology to detect braintumours to ground-breaking studies onthe impact of the recession in UK cities,our researchers are helping to informpublic policy, shape new laws, transformlives and improve the environment.

The continued development of our high-quality research programme is critical toLJMU’s strategic development. We arecommitted to carrying out research that isboth relevant to society and whichensures that our staff can teach studentsfrom an active and personal engagementwith their subject.

LJMU is ranked inthe top 4 post-92universities for thefollowing research:

1st for Electrical and ElectronicEngineering, GeneralEngineering, Sports-RelatedStudies and Architecture andBuilt Environment (jointholders)

2nd for Anthropology andPhysics

3rd for Biological sciences

4th (joint) for Computer Scienceand Informatics

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at a glance

Research funding 2011/2012In 2011/2012, LJMU was awardedresearch grants worth over £8million.

RESEARCH FUNDING BY FACULTY:

n Arts and Professional Studies: £258k

n Education Community and Leisure: £79k

n Health and Applied Social Sciences: £2.87m

n Science: £3.74m

n Technology and Environment: £1.15m

RESEARCH FUNDING SOURCES:

n UK Research Councils: £1.4m

n Health funding (NHS, Department of Health and local health authorities): £3.5m

n EU Framework programmes: £1.3m

NOTABLE RESEARCH CENTRE/INSTITUTE HIGHLIGHTS:

n Astrophysics Research Institute: £1.3m

n Centre for Public Health: £2.8m

n Research Institute for Sport and Exercise Sciences: £1.6m

Our Centre for PublicHealth is a designatedWorld Health OrganisationCollaborating Centre forViolence Prevention

LJMU is ranked joint 1st inthe UK for sport-relatedresearch and our School ofSport and ExerciseSciences is rated as‘amongst the very bestdepartments in the world’

“ I’ve worked with some of the most respected peoplein sports science, with a highlight being my placementat Liverpool Football Club Academy. I got a real insightinto the world of elite sport, speaking to players andstaff and learning from their experiences.”Matthew Draper, BSc (Hons) Applied Sports Psychology graduate

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Social and economic engagement

LJMU continues to be one of the UK’s leading highereducation institutions for our interaction with businessand the community. We are currently ranked in the top 40UK universities for staff and graduate start-upcompanies and in the top 20 for the spin-off companies.

n LJMU is recognised for its best practice in governance, leadership and management

n In 2008, we became the first university in Europe to achieve the European Foundation for Quality Management (EFQM) Excellence Model award

n Football Exchange clients include: Real Madrid, Manchester United, Prozone, Glaxo Smith Kline, UEFA, FIFA, The FA, Umbro and other Premier League football clubs

Working with business andthe community

“LJMU’s Centre forEntrepreneurship is theperfect example of theright support for studentsand graduates who wantto set up their ownbusinesses. I am absolutelyconvinced that if wesupport our young peoplein this way they will rise tothe challenge to reinvigorateour economies.”Robert Hough, Chair of Liverpool CityRegion’s Local Enterprise Partnership

Our aim is to berecognised globallyas a modern civicuniversity whilestill retaining ourstrong links withLiverpool, a truecity of the world.

We first launched our Student Enterprise programme in2003, thanks to funding from the European Social Fund.Now our dedicated Centre for Entrepreneurship is helpingto equip students and graduates with the skills andconfidence to drive economic recovery through newbusiness formation. It is also helping LJMU deliver lastingimpact both within Merseyside and beyond, firmlypositioning the University as a ‘talent pipeline’ for thebusiness leaders of the future.

Enterprising students

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LJMU’s Roscoe Lecture Series – the largest public lecture series inLiverpool – attracts up to a 1,000 people per lecture. The Series isnamed after the ‘founder of Liverpool culture’ William Roscoe, aLiverpool MP who campaigned for the abolition of slavery despitehuge public outcry. The series continues to attract high profilespeakers, including His Holiness the Dalai Lama, HRH the Princeof Wales, Alec Salmond and Lech Walesa.

LJMU has long standing links with the Liverpool BiennialInternational Festival of Art and hosted three major exhibitions in2012. In addition to taking part in the Festival, the School of Artand Design conducts research looking at the role and impact ofBiennials around the world, and is working collaboratively on thissubject with the University of Shanghai.

Culture and debate

For over 15 years, LJMU has led acampaign to recognise the inspiringactions of young people across theNorth West of England. To date over900 primary and secondary schools,further education and sixth formcolleges have joined our GoodCitizenship Award Scheme.

n LJMU works in partnership with over 250 schools and colleges in Merseyside to raise the aspirations of young people across the region.

n Our National Schools’ Observatory` (NSO) brings high quality astronomical images right into the classrooms of around 2,500 schools nationwide.

Inspiring futuregenerations

LJMU offers international students the option ofcompleting pre-postgraduate programmes at theUniversity’s International Study Centre. These degreepreparation offer direct progression onto ourundergraduate and taught postgraduate degrees.

As well as an established presence in South East Asia – theUniversity has an office in Kuala Lumpur and has beenworking with partners in the region since the 1950s –international commercial activities have grown in recentyears with customised contracts in Shanghai and Indiaas well as with professional organisations, such as FIFA.

n Over the years thousands of Malaysian students have followed LJMU programmes in-country and finalised their studies with a summer school in Liverpool.

n Every summer students from Ghana, Malaysia, Singapore and Sri Lanka join LJMU for the University’s Summer Semester Programme.

n The Nigerian Maritime Administration and Safety Agency has selected LJMU to deliver a BSc Nautical Science to its students.

International connections

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A sustainable futureLJMU received a First Class Award and isranked 21 out of 145 universities in thePeople and Planet Green League 2012 -the UK's only comprehensive andindependent green ranking of universities.

Good quality higher education requires goodquality environments. That’s why we have investedover £160million over the last 10 years in newcapital projects and modernising existing buildingsand facilities. By investing in our campus andimproving facilities for our staff, students and otherstakeholders, we are also advancing the renewaland regeneration of Liverpool, driving up itscompetitiveness, improving the public realm andmaking the city a more attractive place in which tolive, work and socialise.

LJMU is serious about becoming a low carbonuniversity and we are committed to reducing ourcarbon footprint by 25% by 2015. In addition theUniversity was awarded the EcoCampus SilverAward (a national environmental managementsystem for the higher education sector) in 2011,and is now planning its Gold Award submission forlater in 2012.

The £38million RedmondsBuilding provides industry-standard film andbroadcasting studios as well asgeneral teaching space andprofessional training facilities.

The £25.5m Tom Reilly Buildingboasts outstanding facilitiesincluding appetite laboratories,psychology testing labs,neuroscience labs, an indoor70-metre running track, adriving simulator and achronobiology lab.

Our Art and Design Academyreceived a prestigious RoyalInstitute of British Architects’award as well as the WorldArchitecture News BestEducational Building prize.

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FinancialStatements2012

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Operating andFinancial Review

Scope of the Financial StatementsThese are the consolidated statutory accounts of LiverpoolJohn Moores University and its subsidiaries for the yearended 31 July 2012.

Vision and MissionOur Vision is to be recognised as a modern civic universitydelivering solutions to the challenges of the 21st century.

Our mission is to create and sustain a vibrant community forlearning and knowledge where staff and students worktogether in an active and supportive partnership: providingopportunities to enrich our students, partners and widersociety through education, training, research, scholarship andknowledge transfer.

Strategic Objectives Our actions in pursuing our Vision and Mission are guided byour Strategic Framework for 2012 to 2017 which sets out adetailed roadmap for the University. Our strategic objectivesare to be:

n A university known for excellent teaching within an academically engaging and supportive student experience that produces graduates who, as citizens, are prepared for life and the world of work and are valued as contributors to society.

n A university where scholarship is at our core and our Research Institutes are recognised as beacons of excellence that provide inspiration and motivation for staff, students and society.

n A university which is true to its values and is recognised globally as a driving force that through partnership supports wealth creation, social well-being, culture and the arts within the city-region and beyond.

Successful achievement of these outcomes will requirestrong focus, strategic management discipline and a clearand relentless pursuit of the principles of excellence. Robustmechanisms and structures are in place to deliver theserequirements.

Operations Students

LJMU is the tenth largest University in the UK with 25,450students in Liverpool plus a further 4,500+ students enrolledon accredited University courses overseas. Actual full timeequivalent numbers for 2011/12 were 20,050 an increase of2% compared with 2010/11.

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Research & Scholarship The University continues to focus its research efforts andresources in areas of demonstrable research excellence; ourResearch Centres and Institutes. Additionally a number ofnewly emerging clusters of research activity are beingdeveloped, building on best practice elsewhere in LJMU. CoreHEFCE QR research funds based on RAE2008 performanceare increasingly used to support academic staff costs inresearch-active schools. Non-HEFCE research grant incomehas a critical role in supporting the research projects that staffundertake and increasingly make a contribution to academicstaff salaries through the full economic costing model.

The new strategic framework for the institution for 2012-17provides a clear roadmap for the University for deliveringresearch excellence that has impact across society andserves as an inspiration to all.

Highlights

n Particular research strengths remain in STEM (e.g., astrophysics, built environment, life sciences, public health, electrical and general engineering, maritime) and STEM-related subjects (e.g., biological anthropology, sports sciences). Together these account for >90% of external research income to LJMU.

n As at the end of July 2012 LJMU was managing a research grants portfolio of £49m. £8.4m worth of new research grants were awarded to LJMU in 2011-12.

n LJMU continues to lever external research grant income using core HEFCE research income at a rate above the sector average (>£2 earned for every £1 of HEFCE QR compared to sector median in 2011 of £1.5; HESA data).

n LJMU remains 57th in the UK for research grant income (2010-11 HESA research income), ahead of all but one of the post-1992 HEIs and ahead of some well-established research-led Universities.

n Planning for the next round of research assessment (the Research Excellence Framework, REF2014) is well underway with a series of externally-led reviews taking place in the Autumn and Winter of 2012 in preparation for the submission in November 2013.

n After almost 10 years of sustained growth ahead of the sector average, external research grant income in 2011-12 was £8.1m (21% below 2010-11). A high reliance on public-sector funding (research council, NHS and local authority) and the budget constraints imposed on those external funding streams coupled with ever-increasing inter-University competition has had considerable impact on the levels of external funding available.

n LJMU derives the bulk of its grant income from a small number of research areas, in particular the Centre for Public Health. That Centre’s activities have been constrained because of the severe limitations and policy changes imposed by the Department of Health. The Centre’s performance remains exceptional (34% of total research income generated by a small team of permanent LJMU staff).

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n UK Research Council income (the most competitive source of research funding) accounts for approximately 17.5% of our total research income, with 80%+ in The Astrophysics Research Institute.

n Funding from the Technology Strategy Board and European Framework programmes has steadily increased and will remain an important source of funding. Academic staff continue to submit substantive research grant bids to external organisations at a rate in excess of 230 grant bids per annum. Success rates are in line with our peer group.

n HEFCE altered the funding formula across the sector for the allocation of QR funds (reflecting performance in RAE2008 by each HEI). The more selective approach, funding only the very best subjects, resulted in a drop in QR income for LJMU in 2011-12 of 9%.

n Significant planned 2012-13 strategic investment in academic posts in targeted areas of LJMU building on research excellence (notably Astrophysics and Sports Science) should have a significant positive effect on research grant income and in future HEFCE QR income following REF2014.

n LJMU was selected as one of the UK Universities to help deliver a new PhD program for the Republic of Iraq. Approximately 50-60 PhD students are expected at LJMU as part of this scheme, initially to study English for one year before embarking on their PhDs. The first wave of students is expected in January 2013

Commercial Enterprise, Technology Transfer andStudent Entrepreneurship

The University combines Higher Education InnovationFund (HEIF) funding and core funds to ensurecontinuation of a range of support for CommercialEnterprise, Technology Transfer and StudentEntrepreneurship activity across the University.Successful complementary European Union fundingbids are used to further develop the support forstudent and alumni start-up businesses.

During the year the annual Higher Education Businessand Community Interaction survey (HE-BCIS) waspublished and showed the total annual value of LJMU’sinteraction with business and the community reached£14.3m. Ranked against the 164 UK HEIs in the survey,LJMU was 61st for the total value of interaction withbusiness and the community.

Highlightsn In 2011/12 the University’s commercial enterprise turnover reached £2.5m of which 28% came from international contracts.

n LJMU welcomed over 700 international students to the University as part of the 2012 Summer Semester programme.

n In 2011/12 the number of students undergoing bespoke entrepreneurship training was 1,313, the high profile and popular Start-Up Network attracted 412 new members (making membership of nearly 2,000) and 46 Enterprise Fellowships were awarded to support the establishment of student businesses.

n Academic Partnership income of £6.5m is 4% above 2010/11.

n Conference and Events Services income is 22% above 2010/11.

n LJMU worked with Merseyside Fire and Rescue Service to undertake the largest research project ever conducted in the UK around Carbon Monoxide poisoning. The ground breaking research is expectedto influence policy and practice around Carbon Monoxide safety.

Resources

Capital Development n The University continues to invest significant amounts of capital and has made excellent progress delivering its capital development strategy.

n The Redmonds Building is now home to three of LJMU’s largest academic schools: the Liverpool Screen School, the Liverpool Business School and the School of Law, and is specifically designed to give students access to ‘real world’ environments where they can hone their professional skills before entering the job market. Other facilities on offer to the 2,000 students using the building include: three large lecture theatres, a range of flexible teaching spaces, a lounge area and roof terraces. There are also several social learning areas and IT suites, all of which create not only a contemporary business environment, but also a resourceful and comfortable space where students may stay and work after lectures.

n The investment strategy for the Byrom Street Campus continues to progress well with the refurbishment of general teaching space and the refurbishment of the remaining large lecture theatre.

n The University has received confirmation from Liverpool City Council that planning approval has been granted and work is on-going to develop state of the art research and teaching laboratories in the Max Perutz Building.

n Planning approval has been granted for the development of a new building to provide student social space and catering facilities. This will take the form of a new building in the courtyard in the heart of Byrom Street Campus which will extend the existing coffee bar which currently provides seating for 45

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people, to a facility which provides seating for 240 people.

n The refurbishment of the 1st and 2nd floors of Tithebarn Street and the Stanton Fuller Lecture

Theatre is complete and feedback continues to be verypositive from both students and staff.

IT Developments

n Significant progress has been made in the introduction of mobile technologies with further enhancements to the CampusM pastoral LJMU App and go live with Blackboard Mobile Learn, an app providing mobile access to learning materials and communications.

n A PC Availability system has been rolled out enabling students to find out where PCs are available prior to travelling to University locations, addressing a significant customer requirement; mobile access is available via the LJMU App.

n The innovative JISC/HEFCE funded Digital Academic Records Exchange (DARE) project reached a successful conclusion with seven partner institutions demonstrating the ability to deliver secure academic documents, such as the ‘HEAR’ in the Cloud; this has resulted in the delivery of an operational service and has attracted additional funding to support further development and take up. The project is cited externally as an innovative and pragmatic cloud-based approach to service delivery and has attracted a lot of attention.

n An LJMU Portal Strategy has been developed with the support of an external partner, aimed at providing integrated services for staff and students, and an associated Applicant Portal project has been initiated

n In the area of Learner Services, projects to support digital repositories and enhanced vertical search facilities have been initiated

n Significant investment of around £250,000 has been made in storage infrastructure to increase system resilience

Environmental Sustainability n LJMU has been awarded the Ecocampus environmental management system Silver award in 2012.

n LJMU has received a First Class Honours in the People and Planet Green League Table.

n The University continues to deliver against its Carbon Management Plan which is assisting the University to face the future challenges, such as rising utility costs and compliance with legislation. It will also assist in controlling operating costs and making a significant contribution to government and HEFCE carbon reduction targets. The Plan is underpinned by various policies and strategies including the

Environmental Policy, the Procurement Strategy, the Sustainable Procurement Policy, the Travel Plan, the Biodiversity Policy, the Carbon Management Policy, the Energy Policy, the Waste and Recycling Policy and the Print Strategy.

Sports FacilitiesAn agreement with Liverpool City Council’s Sports andLeisure Division provides the following facilities tostudents and staff:

n The provision of general access to a range of sports and leisure facilities across the Life Style venues.

n To progressively allow the relocation of those academic programmes that have a sport related component which are currently delivered at the IM Marsh Campus to the Wavertree Centre.

n To enable the Liverpool Students Union to provide facilities for its club and societies, presently provided either at IM Marsh or purchased from private providers.


Results for the Year

The University’s consolidated Income, Expenditure and Results for the year to 31 July 2012 are summarised as follows:

2011/12 2010/11

£000

Income 170,426 176,267Expenditure 165,497 167,270

Surplus after depreciation of assets at valuation and before tax 4,929 8,997Loss on disposal of fixed assets (250) -

Surplus/(deficit) after depreciation of tangible fixed assets at valuation and 4,679 8,997disposal of fixed assets and before tax

Share of Operating profit/(loss) in associate (59) 15

Taxation (57) -

Surplus/(deficit) after depreciation of tangible fixed assets at valuation, 4,563 9,012disposal of assets and tax

Surplus/(deficit) for the year transferred to accumulated income in 29 96endowment funds

Surplus/(deficit) for the year 4,592 9,108

Difference between historical cost depreciation charge and the actual 708 730depreciation charge for the year on the revalued amount

Realisation of property revaluation gains of previous years on disposal of assets 1,402 -

Surplus/(deficit) for the year on a historical cost basis 6,702 9,838

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Financial Headlines

n An underlying operating surplus of £8.0m

n Historical cost surplus for the year £6.7m

n Capital expenditure £30.1m

n Income decrease of 3.3% to £170.4m

n Decreased expenditure of 1.0% to £165.5m

Income and Expenditure Account2011/12 has been an excellent year as a result of thecontinuing strategic approach to the finances of theuniversity with an outturn surplus of £4.6m for the year.An underlying operating surplus of £8.0m was achieved.The annual FRS17 charge was £2.6m with the Pensionliabilities in the Balance Sheet increasing by £15.9m.

Total Income decreased by 3.3% to £170.4m. The maindecrease was due to HEFCE core funding andearmarked grants reducing by a further £4.9m.Research income reduced by £2.2m. These decreaseswere partly offset by the increase in student numbersand associated fee income.

Expenditure decreased by 1.0% to £165.5m. Staffcosts have decreased by 3.0% which reflects thefundamental restructuring which took place during2009/10 and 2010/11 and has assisted with the deliveryof significant savings in this and future years. Otheroperating costs remained stable, but with additionalinterest costs of £1.3m as expected, in line with theadditional bank loans. The impact of FRS17 (RetirementBenefits) was a decrease to group surplus of £2.62(2010/11 £2.86m).

Balance SheetThe Balance Sheet has maintained its strength. Incomeand Expenditure Reserves excluding the PensionReserve (associated with FRS17) are £63.2m showinga significant increase of £9.3m compared with theprevious year. The revaluation reserve has decreasedfurther this year by £2.1m due in the main to the saleof the property at 2A Myrtle Street. The pension liabilityreserve has increased by £2.8m. Total reserves arenow £27.5m compared to £36.3m the previous year.This is largely due to the £15.9m increase in the FRS17Pension reserve.

Fixed Assets have increased by £22m. Assets underConstruction are £37.3m (10/11 £17.3m). The increasewas mainly due to costs incurred on the RedmondsBuilding which was completed in August 2012.

Cash deposits have increased by £6m during the year, andthe final mandatory tranche of borrowings of £10m wasdrawn down in August 2011. Capital expenditure was£30.1m.

Governance and Risk

n The University’s governance practices are consistent with the revised “Guide for Membership of Higher Education Governing Bodies in the UK” by the Committee of University Chairman (CUC), published in November 2004.

n The University remains strongly committed to adopting best practice in terms of Governance and Management. The management system has been developed and improved since 2002 using the EFQM Excellence model framework. Building on the success of becoming the only university in Europe ever to reach the standard required to win a full excellence award (winning the UK Excellence Award in 2008) The University has since been a finalist in the European Excellence Award, going on to be announced as a Prize Winner in the category of ‘Building Partnerships’ at the awards ceremony in Munich in October 2011.

n Risk management has been incorporated into the corporate planning and decision making processes of the University. The Institutional Risk Register is reviewed on a regular basis in conjunction with the periodic assessment of performance against objectives.

FutureDuring the last 12 months, LJMU has workedextremely hard to rise to the challenges presented bythe changing political and economic climate, and theramifications of the new fee regime. As aconsequence, LJMU has fully achieved its targetedhome student control numbers for 2012/13 whilstdemonstrating enhanced retention rates for existingstudents. This is a significant achievement.

Notwithstanding, we will need to continue towork hard to ensure that this level of successis delivered in 2013/14 and onwards. This willbe achieved by successful implementation ofthe 2012-17 Strategic Framework. This clearlysets out our ambitions for the coming 5 years.

Conclusion 2011/12 has been an extremely successful yearfor LJMU. Significant investment ininfrastructure has continued as demonstratedby the successful opening of the Redmonds

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Building. A surplus significantly in excess of budget hasincreased LJMU’s net worth before pension liabilities.

This, coupled with the implementation of the 2012-17Strategic Framework and a significantly enhancedleague table position, places LJMU in a strong positionto manage the challenges and difficulties currentlyfacing Universities in the light of the changing financialclimate ahead.

Sir M ThorntonChairman

Delivering the Public BenefitLiverpool John Moores University (LJMU) is a HigherEducation Corporation (HEC), as defined by theEducation Reform Act 1988, and, as such, is an exemptcharity with the charitable purpose of the advancementof education for the public benefit. The Universityachieves its charitable purpose by creating appropriatehigh quality opportunities that enable learning,advancement, development, and employment, and thatare open to as many individuals and communities as isachievable and sustainable. The Corporation isregulated by HEFCE by virtue of the Charities Act 2006,now consolidated into the Charities Act 2011.

The primary beneficiaries of the University’s charitablepurpose are: LJMU’s students who are directlyengaged in learning, scholarly activity or research; therecipients of the University’s research and knowledgetransfer activities, including employers and businesses;school children and alumni of LJMU who can engage ineducational events organised by the University or useits academic facilities; the general public who are alsoable to attend various educational activities in theUniversity such as exhibitions and public lectures.These activities contribute to the cultural and economicenrichment of our city, region and beyond.

Statement of Public BenefitThe Board of Governors, also known as Trustees, havecomplied with their duty to have due regard to theguidance on public benefit published by the CharityCommission, and particularly to its supplementarypublic benefit guidance on the advancement ofeducation, in accordance with the requirements of theHEFCE acting as principal regulator of English highereducation institutions under the Charities Act 2011. TheCharity Commission’s guidance on public benefit isalso included in the induction of new governors.

Mission, Vision and ValuesLJMU’s mission is “to serve and enrich our students,clients and communities by providing opportunities foradvancement through education, training, research andthe transfer of knowledge”. The University’s mission,vision and values therefore reflect LJMU’scommitment to the public benefit.

Since becoming a university, LJMU has grownsubstantially from around 8,000 students in 1988 tonow more than 25,000 students studying across 5faculties, with approximately 9,000 students graduatingthis year. This represents a substantial contribution toaccessible Higher Education in the UK.

The University’s vision gives a particular focus to thebenefits that both the student and society receive as aresult of the University’s education. The vision is:

‘To be recognised as a modern Civic Universitydelivering solutions to the challenges of the 21stcentury’.

LJMU’s core values are embedded in the University’sStrategic Plan, which illustrates clearly the University’scommitment to the public benefit. The Board ofGovernors is responsible for defining the strategic aims ofthe University and has recently approved the newStrategic Framework 2012-2017. The new frameworkreflects the Board of Governors’ commitment to the publicbenefit as illustrated in the University’s mission statementand vision (above) and charitable purposes below:

At LJMU our mission is to serve and enrich our students,clients and communities by providing opportunities foradvancement through education, training, research andthe transfer of knowledge. LJMU’s charitable purpose, asperceived by its members and stakeholders can besummarised as follows:

n To create appropriate high quality opportunities that enable learning, advancement, development, and employment, and that are open to as many individuals and communities as is achievable and sustainable.

n To create and support opportunities for successful participation by under-represented groups, as well as for continuing personal, professional and skills development for all members of the University.

n To create an environment in which staff and students can engage in research that is innovative; that contributes to knowledge or to professional practice; that encourages personal and professional development; that enhances learning; or that is of social or economic importance to communities.

n To reinforce the entire range of activities with a culture of scholarship, and with a growing body of specific research that is consistently of national and international standing and benefit.

n To endeavour through partnership and enterprise to impact upon economic development and regeneration, as well as social and cultural advancement, whether at local, national or international levels.

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BeneficiariesStudents who attend the University benefit directlyfrom the quality of the education they receive. TheUniversity’s World of Work Programme aims to ensurethat every student is equipped with the skills they needto stand out from the crowd and to successfully engagein the world of work, either because they possess skillswhich are highly valued by employers or because theyare well equipped to set themselves up in their ownbusiness. The World of Work Careers Centre offers arange of services designed to support graduates in theirjob hunting and these services are available to LJMUalumni who graduated up to 3 years ago.

The Centre for Entrepreneurship supports students andgraduates who want to set up their own businessesand is part of the NW HE Enterprise Champions ERDFproject. The Centre provides support with developingbusiness ideas, working as freelancers, launchingproducts and services and growing an existingbusiness. It also provides help with and access toprofessional networking opportunities, supportiveacademic staff and relevant business training.

Members of staff at LJMU engage actively in publicdebates on their area of expertise. Their insights intocurrent events and discoveries help to shape andinform public opinion and benefit the local communityand society as a whole.

There are many examples of providing public benefitacross the University and a select few are given belowas illustrations:

LJMU’s Astrophysics Research Institute (ARI) recentlyplayed host to nearly a hundred astrophysicists from 18countries who met to discuss the latest results on themost distant and powerful explosions in the universe,Gamma Ray Bursts (GRBs), with some of the researchin this area unveiled for the first time and covered bythe BBC and other international media. The ARI is atthe forefront of Gamma Ray research, with the roboticLiverpool Telescope on the Canary Island of La Palmahaving a uniquely powerful capability to react rapidly tonotifications from Gamma-Ray detector satellites –such as NASA’s Swift – and catch the opticalcounterpart and fading afterglow of the explosion.

LJMU’s School of Sport and Exercise Sciences deliversinnovative, research-led and employability focusedundergraduate and postgraduate programmes that aresupported by world class academics and state-of-the-art laboratory facilities. It is the only Sport andExercise Science Department in the UK designated asa Centre of Excellence in Teaching and Learning. Morethan 90 children from schools across the region wererecently invited to LJMU to see how science would beused during the London 2012 Olympic and ParalympicGames, providing pupils with a unique universityexperience, inspiring them to study science and pursue

a science-related career. This is part of a continuingprogramme of outreach activity by LJMU with localschools.

Open Labs is a European-funded initiative at LJMUtasked with developing successful researchcollaborations between University academics and smalltechnology businesses. It is led by the Faculty of Arts,Professional & Social Studies. It aims to stimulate andsupport business/HEI collaboration and knowledgetransfer. Higher education has a key role to play indeveloping the entrepreneurial capacity of the creativeindustries and encouraging enterprise activity. OpenLabs develops partnerships with these businesses andworks with areas of expertise within the University totake advantage of technology-enabled transformationsin Internet technologies. SMEs have access toUniversity R&D with the potential to be turning intohigh growth opportunities with a global market reach.

The Faculty of Technology and Environment’s ERDFfunded outreach programme project brings togetherthe staff and technical equipment of LJMU’sinternationally renowned General Engineering ResearchInstitute (GERI) within a centralised research laboratorycomplex in order to provide a dedicated facility forengineering research. The facility provides a highquality resource and knowledge base providingexpertise in measurement, sensing, materialsprocessing, advanced manufacturing and biomedicalengineering in order to engage NW based SMEs ascore partners in collaborative RTD and KnowledgeExchange partnerships.

The European Institute of Urban Affairs within theFaculty of Technology and Environment is a longestablished, high profile research and consultancygroup with LJMU. Its key aims are to be a centre ofinternational academic research excellence; a leadingurban policy research group influencing national andinternational policy development and a resource forpolicy-makers and communities in the Liverpool cityregion, North West region and the UK. Some of its keyprojects have significantly influenced the decisions andbehaviour of governments and major publicorganisations, including setting the government policyagenda for cities in the UK and Europe.

The findings of the 2010/11 HE-BCI (Higher EducationBusiness and Community Interaction Survey) haveconfirmed that LJMU’s mutually beneficialrelationships with business and the communitycontinue to be as strong as ever. The University’sreputation for successful engagement withorganisations in the private, public and social sectors isreflected in its ranking of 61st out of 164 HEIs in theUK for this activity, with the value of LJMU’sinteraction with business and the community totalling£14.3m. The survey, managed by HEFCE, is anessential source of information on the exchange of

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knowledge that takes place between HEIs and theworld of business and the community. Data reportedin the survey provides invaluable intelligence forknowledge exchange practitioners and policy-makersalike, providing an in-depth commentary on the extentof trends in knowledge exchange activity in the UK.

‘Business’ in this context refers to public, private andsocial sector partners of all sizes and ‘Community’ istaken to mean society as a whole outside the HEI,including all social, civic and cultural organisations andindividuals.

LJMU’s key benchmarks include:

n 1st among post-92 UK universities and 42nd from the UK for income from contract research.

n 17th in the UK for number of formal (not HEI owned) spin-offs established and 21st for the current turnover of these firms.

n 37th in the UK for number of staff start-ups established and 23rd for the current turnover of these firms.

n 35th in the UK for number of graduate start-ups established and 21st for the current turnover of these firms.

n 44th in the UK for value of bespoke Continued Professional Development (CPD) for business and community.

n 72nd in the UK for the value of consultancy contracts.

n 58th in the UK for income from collaborative research.

n 55th for the value of contracts from facilities and equipment related services.

The Survey results show that LJMU continues toperform strongly across all areas of entrepreneurshipand knowledge and technology exchange. LJMU isfirmly focused on optimising its return on investmentfrom these activities, be that return income, reputationenhancement and most importantly, benefit to ourstudent community.

ResearchUniversity academic staff are expected to publish theresults of research they have undertaken in peerreviewed academic journals, to publish books, tosubmit and present to research conferences and tofeed that research into their teaching. The Universitymakes available publicly, via its website, access to itsresearch archive and has collaborative and reciprocalarrangements in place with other university libraries foraccess or borrowing facilities for students andacademic staff.

Under an initiative entitled ‘inspire’, the University hasinvested significantly in new research staff and ismaking careful and progressive preparations for theREF 2014.

Benefit related to teaching and learning

Some illustrations of the University’s contributions are:

The Centre for Public Health has an internationalreputation for quality in leading-edge researchactivities. Projects range from working with localorganisations and partnerships to national andinternational work programmes across the University’sareas of expertise including alcohol, drugs, violence,dental health and sexual health. The applied nature ofthe University’s work ensures that many of the keyissues that affect the public are identified andhighlighted. Much of the intelligence and researchfindings are used to develop and deliver effectiveservices and interventions that benefit people’s livesand help address inequalities in health. While the workhas a national relevance and application, some of themost deprived local communities benefit directly fromthe University’s work. Engagement with the public isan essential part of the University’s work and theresearch findings, together with their implications forhealth and wellbeing, are communicated directly to thepublic in a meaningful and accessible format via theUniversity’s media and communication strategy.Recent work undertaken by the Centre for PublicHealth for the public benefit includes studies into:

n Whether parents should give alcohol to children and how much

n The risks and harms associated with different forms of drug use

n Where best to base different health care services

n How to make city centres safe at night

n How many lives would be saved if 20mph speed limits were implemented in residential areas

The Faculty of Education, Community and Leisureprovides Teacher Education programmes that producehigh quality teachers to meet local, regional andnational needs in schools and other educationalsettings, with a focus on identified priority (shortage)areas such as STEM subjects, modern foreignlanguages and primary/early years teaching. TheFaculty also makes a significant contribution to thecontinuing professional development of servingteachers with particular expertise at post-graduatelevel in Special Educational Needs, Leadership andManagement and Mentoring and Coaching. Inaddition, it is a government partner in the ‘Teach First’programme, which seeks to tackle educationaldisadvantage and this commitment is reflected in arange of research and outreach work undertaken

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within local socially and economically deprivedcommunities. This work includes leadership ofcollaborative action research projects with partnerschools and third sector organisations such as Evertonin the Community, engagement with local communitygroups to undertake applied research into looked afterchildren and social inclusion and the promotion ofsafer schools in partnership with Merseyside Police.

The Faculty of Health and Applied Social Sciencesdelivers a range of courses that supply graduates tothe health, social care and third sector workforce tomeet local, regional and national demands. Pre andpost registration programmes include adult, child andmental health nursing, paramedic, midwifery, healthvisiting and social work as well as social care,environmental health and counselling courses. TheFaculty also offers a wide range of short CPD coursesand masters level programmes including non-medicalprescribing, Advanced Paediatric Practice and BowelCancer Screening. Much of this CPD work is carriedout in collaboration with local partnerships with localNHS Trusts which play an active part in delivery ofprogrammes. An MSc. In Public Health developspractitioners with both UK and international interests.

The Research Unit for Financial Inclusion works inpartnership with communities and externalorganisations to address current issues related topoverty, financial exclusion and credit unions. Thiswork has contributed to discussion at UK andEuropean policy level and in the financial servicessector.

The faculty is a key partner in the pan-EuropeanInnovate Dementia project, funded by the EU, whichcommenced in July 2012 and will run until 2016. Theproject focus is to develop and test innovative modelsfor dementia care across Europe.

Economic DevelopmentLJMU manages European Development FundContracts worth £34m for the benefit of the regionaleconomy, and generates about 4 pence in everypound of Liverpool’s economic output per head ofpopulation. Since 2003, LJMU graduates have startedover 40 companies.

Student AccessLJMU is proud of its longstanding record of reachingout to students from disadvantaged backgrounds andensuring that the benefits of a university education areaccessible to everyone with demonstrable academicability irrespective of their social or economicbackground. The University invests substantially incarefully targeted financial support for students fromlower income backgrounds offering a holistic approachto help aid retention and progression. 67.6% ofLJMU’s home undergraduate students benefited fromthis support in 2010/11 and a total of £8.555 million

was invested in bursaries and scholarships for 10,053students. This includes £3.158 million that was paid tonew entrants.

The University also provides funds to support studentsexperiencing financial hardship and is part of aninitiative set up by the Financial Services Authority toimprove the financial management/awareness ofstudents.

The University provides a range of personal supportservices to its students, such as guidance and adviceon essential academic and personal skills, individualteaching and learning plans for students with adeclared disability, and student counselling.

LJMU continues to offer public benefits under theterms and guidance of the Charity Commission, tostudents, staff, the local community and wider societyby way of a number of activities and initiatives:

Trading with IntegrityAs one of the largest employers in the GreaterMerseyside region, LJMU continues to develop itsapproach to ethical trading. This is done through thepurchase of Fairtrade goods where possible andappropriate, balancing always the benefits ofdeveloping educational opportunities for the citizens ofthe world with a careful consideration of the political,ethical and human rights records of the governmentsof those countries in which LJMU operates or recruitsstudents.

Community EngagementAs a major employer in the region, with some 2,500staff and 25,000 students in Liverpool, LJMUcontributes significantly to the local economy. TheUniversity is mindful of its obligations to be a goodneighbour, and engages frequently with the LocalAuthority and community groups to consult on theimpact of LJMU operations. This includes animaginative partnership with the Liverpool Students’Union through which student communityrepresentatives help to manage the relationshipbetween local residents and the student population.There is also a staff and student volunteering scheme,which helps teams of LJMU people to work onvaluable projects for the benefit of the community.

LJMU takes an active role in supporting the region,with many LJMU staff taking roles in local companies,agencies, arts groups, charities, schools and colleges,thereby contributing to economic growth, as well asthe social and cultural wellbeing of the region.

As a flag-ship of LJMU’s community engagement, theRoscoe Foundation for Citizenship promotes goodcitizenship amongst the young people in the GreaterMerseyside region. More than 900 schools areengaged in the scheme, to promote good citizenship

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to school children by making awards to role models insociety. The Foundation also runs the prestigiousRoscoe Lecture series, securing high profile speakersfrom the national and international community topresent thought-provoking public lectures that are freeand open to the community in the North West.Audiences typically number over 1000 (and sometimesreach 2500) and tickets are free of charge. Speakershave included notable people from the fields ofnational and international politics and diplomacy,academia, religion and belief, journalism andentertainment.

LJMU’s academic activity also has many publicbenefits. For example, LJMU’s world-leadingAstrophysics Research Institute owns and operatesthe World’s largest and most sophisticated RoboticTelescope, based in the Canary Islands, and time onthis telescope is made available to the NationalSchools' Observatory alongside its function as aNational Facility for research. The LJMU-led project inturn brings leading edge astronomy into Britishclassrooms in over 1,000 schools in order to stimulateand enhance young peoples’ enthusiasm for scienceand technology. The Institute also helped found, andcontinues to provide knowledge input to, ‘Spaceport’,a locally based major tourist attraction, owned byMersey Travel.

A joint venture between Everton in the Community(EITC), Everton Football Club (EFC) and LJMU’s Schoolof Sport and Exercise Sciences (SPS) has seen thedevelopment of a unique satellite site within GoodisonPark (EFC Football Stadium). Equipped with gym andfitness equipment, the Centre offers the localcommunity the opportunity to be made aware ofhealth and fitness issues in a friendly environment.The Centre bids to promote ‘real’ health andbehavioural change to improve the quality of life andthe wellbeing of people within our communityalongside cutting edge research to evaluate the impactof our health and wellbeing projects.

LJMU joined Merseyside Black History MonthSteering Group, Liverpool City Council, NHS,Merseyside Police and other key private and publicsector organisations to host the 2011 Black Achievers’Award, celebrating the achievement of members ofthe black and other minority (BME) communities andto recognise the contributions made by individuals,groups and organisations to the development ofMerseyside BME communities.

LJMU played host to the Liverpool Biennial which sawone of Liverpool’s landmark buildings open to thepublic for the first time in history. The University’sCopperas Hill Building – formerly home to the RoyalMail – exhibited three major exhibitions during theLiverpool Biennial 2012, the largest contemporary artfestival in the UK. This partnership with Liverpool

Biennial was a great opportunity for LJMU studentsand members of the public to experience aninternational arts festival of this calibre.

LJMU’s School of Sports Science, which has beeninvolved with most Sport Relief challenges, givingtraining to David Walliams and Chris Moyles, amongothers, also provided training for John Bishop toensure he completed his ‘Bishop’s Week of Hell’ forSport Relief. John Bishop was hoping to raise enoughmoney to pay for a vaccine against five deadlydiseases for 250,000 children in Africa, but also to helppeople living incredibly tough lives in the UK. Theamount raised so far, £1.6 million, well exceeded thisexpectation.

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BOARD OF GOVERNORS

The University is an independent Higher Education Corporation whose authority derives from the Education Reform Act 1988,and the Further and Higher Education Act 1992.

The Board of Governors derive their authority from the University’s Instrument and Articles of Government which was approvedby the Privy Council on 5 March 1993, and revised in 1995 and 2002.

The Instrument and Articles of Government state that the Board shall consist of not less than twelve and not more than twenty-four appointed members. The Board must decide what size it wishes to be. The Board currently consists of twenty members,of whom up to thirteen would be independent members, one nominee each from the Academic Board and two students, twostaff governors and two co-opted members. The membership of the Board is completed by the Vice-Chancellor, who is theChief Executive.

In the period from 1 August 2012 membership of the Board of Governors has been as follows: -

Ex-officio MembersProfessor M A Brown Vice-Chancellor & Chief Executive (Retired 31st August 2011)Professor Nigel Weatherill Vice-Chancellor & Chief Executive (Appointed 1st September 2011)

External Independent MembersSir M Thornton Chairman and Pro Chancellor

Chairman of Remuneration CommitteeChairman of Nominations Committee

Ms N. BensonMs K Byrne Appointed 2 July 2012Mr J CarsonMs C DoveSir J Dwyer Retired 11 September 2011Sir D Henshaw Retired 30 April 2012Mr R Hill Chairman of Finance Committee Mr A HolroydMr P Hyland Appointed 2 July 2012Sir B Massie Deputy Chairman of Audit CommitteeMr B McCann Appointed 26 March 2012Mr G Morris Deputy Chairman Finance CommitteeMrs A Redmond Deputy Chairman Audit Committee Retired 14 February 2012Ms D Shackleton Chairman of Audit Committee Judge Elizabeth Steel Chairman of Employment Committee Mr J Stopforth Appointed 15 February 2012

It was noted that the Instrument of Government allowed for the appointment of a successor Governor within 6 months of an Independent Member ceasing to hold office.In this respect it was agreed that Ms N Benson would succeed to the vacancy that would be left by Judge E Steel, who would cease to hold office in December 2012.

External Co-opted MembersMr A Bell Co-opted Governor from Health Sector Retired 23 January 2012Mr P Holme Co-opted Governor from Education Sector

Deputy Chairman of Employment Committee

Nominee MembersDr T Livsey Staff Governor (Academic Board Nominee) Mr D McCabe Student Governor (Student President) - Retired 6 July 2012Mr J McGarvey Student Governor (Vice President Community)

Elected 11 November 2011, Retired 6 July 2012Mr P Abernethy Student Governor (Student President) Elected 7 July 2012.Mr T Aldus Student Governor (Vice President Activities) Elected 7 July 2012.

Staff MembersMr M Grayshon Staff Governor (Non Teaching Staff) Retired 25 September 2011Professor P Lisboa Staff Governor (Teaching Staff)Mr R McGee Staff Governor (Non Teaching Staff) Appointed 24 October 2011

The Board of Governors are the Trustees of the University.

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OFFICERS AND ADVISORS OF THE UNIVERSITY

Vice-Chancellor and Chief Executive Professor Nigel Weatherill (appointed 1st September 2011) Professor Michael Brown (retired 31st August 2011)

Bankers Barclays Bank plc6th Floor 1 Marsden StreetManchester M2 1HW

External Auditors KPMG LLPSt James’ SquareManchester M2 6DS

Solicitors Davies Wallis Foyster5 St Pauls SquareOld Hall StreetLiverpool L3 9AE

Internal Auditor Deloitte LLPHorton HouseExchange FlagsLiverpool L2 3PG

RESPONSIBILITIES OF THE BOARD OF GOVERNORS OF LIVERPOOL JOHN MOORES UNIVERSITY

In accordance with the Education Reform Act 1988, the Board of Governors of the University is responsible for theadministration and management of the affairs of the University and is required to present audited financial statements foreach financial year.

The Board of Governors is responsible for keeping proper accounting records which disclose with reasonable accuracy atany time the financial position of the University, and to enable it to ensure that the financial statements are prepared inaccordance with the Education Reform Act, the Statement of Recommended Practice on Accounting for Further andHigher Education Institutions and relevant Accounting Standards. In addition, within the terms and conditions of aFinancial Memorandum agreed between the Higher Education Funding Council for England and the Board of Governors ofthe University, the Board of Governors, through its designated office holder, is required to prepare financial statementsfor each financial year which give a true and fair view of the state of affairs of the University and of the surplus or deficitand cash flows for that year.

In causing the financial statements to be prepared, the Board has ensured 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 departures 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 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 has taken reasonable steps to:

- Ensure that funds from the Higher Education Funding Council for England and the Training and Development Agency are used only for the purposes for which they have been given and in accordance with the Financial Memorandum with the relevant Funding Council and any other conditions which the Funding Council 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 prevent and detect fraud.- Secure the economical, efficient and effective management of the University's resources and expenditure.

Sir M ThorntonChairman - 19 November 2012

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Corporate Governance The University is committed to adopting good practicein all aspects of corporate governance. It aims toconduct its business in accordance with the principlesidentified in the Committee on Standards in Public Life(selflessness, integrity, objectivity, accountability,openness, honesty and leadership) and the Committeeof University Chairs (CUC) Guide for Members ofHigher Education Governing Bodies in the UK, knownas the Combined Code. The Board of Governors hasadopted the CUC’s Governance Code of Practice andworks to ensure that governance practice remainsconsistent with the principles of the Code. TheCombined Code was superseded by the UK CorporateGovernance Code in May 2010 and applies to year endsbeginning on or after 29 June 2010. Therefore the newCode was applicable to the higher education (HE)sector for the first time for the year ended 31 July 2011and has been considered as relevant guidance in thecompilation of this report.

Summary of the University’s Structure of CorporateGovernanceThe University is an exempt charity and as such isrequired to undertake activities, in accordance with itsaims and objectives, which are for the public benefit.The University has had regard to the CharityCommission’s guidance on public benefit, andinformation on how the University has delivered itscharitable purpose for the public benefit is set out onpage 27.

The University’s Board of Governors comprises lay,academic, student and other staff persons appointedunder the provisions of the Education Reform Act1988, the majority of whom are independent and non-executive. The composition of the Board of Governorsis set out on page 34 and the University increased thenumber of Student Governors from one to two at thestart of the 2011/2012 year. The role of Chairman of theBoard of Governors is separate from the role of theUniversity’s Chief Executive, the Vice-Chancellor. Thematters reserved specifically to the Board of Governorsfor decision are set out in the Articles of Governmentof the University, the terms of reference of the Boardand its Committees and under the FinancialMemorandum (FM) with the Funding Council forEngland (HEFCE).

The Board of Governors holds to itself theresponsibilities for the educational character, theongoing strategic direction and the financial solvency of the University. The Board, in addition to its formalBoard and Committee meetings, holds a number ofstrategic workshops and a residential strategic eventeach year, affording it the opportunity to consider,contribute to and influence strategic issues at an earlystage in their development. The Board is alsoresponsible for approval of all major developments,including property developments, and is in receipt of

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regular reports from Executive Officers on the day-to-day operations of the University’s business and itssubsidiary operations.

The Board of Governors has a strong and independentnon-executive element and no individual or groupdominates its decision-making process. The Board isindependent of management and free from anybusiness or other relationship which could interferematerially with the exercise of its independentjudgement.

Upon commencing appointment, Governors arerequired to declare any pecuniary, family or otherpersonal interest, direct or indirect, and this is noted inthe Register of Members’ Interests. Governors areadvised and expected to update their entry at any timeas and when their circumstances change and theUniversity also conducts an annual update inaccordance with the recommendations of the CUC.The Registers of Interests for both the Board andUniversity’s Senior Management are published on theUniversity website. Upon appointment, Governors arealso required to sign a statement of confidentiality.

In accordance with the introduction of the Bribery Act2010, the Governors have taken responsibility forestablishing an anti-corruption culture formulatedaround the six general principles of: Proportionateprocedures; Top-level commitment; Risk Assessment;Due diligence; Communication (including training); andMonitoring and Review.

A statement of commitment from the Chairman of theBoard of Governors outlines that the Board ofGovernors expects that all staff, associates and agentswill conduct business in accordance with the higheststandards of ethical behaviour and that any bribery, orany form of corruption, by a member of staff of theUniversity will be considered gross misconduct and themember of staff may face dismissal. Agents,consultants and business partners who work with, oron behalf of, the University must act with integrity andbehave ethically. The University will terminateagreements with such agents, consultants andbusiness partners in the event of any breach of anti-bribery law, corruption or unethical behaviour of whichit becomes aware.

The Board of Governors meets a minimum of fourtimes a year and maintains several Committees: aFinance Committee; an Employment Committee; aRemuneration Committee; a Nominations Committee;and, an Audit Committee. All of these Committees areformally constituted with terms of reference andcomprise lay members of the Board of Governors. TheChairman is not a member of the Audit Committee andthere is no overlap in membership of the Audit andFinance Committees. The Vice-Chancellor is not amember of the Audit Committee and attends that

Committee in his capacity of Chief Executive ratherthan as a Governor. The Board of Governors and itsCommittees review their terms of reference on aregular basis in the light of prevailing circumstanceswith a view, inter alia, to ensuring that they areembedding risk management effectively into theirwork. The Chairman of the Board of Governors is SirMalcolm Thornton. The full Board of Governors met on10 October 2011 (Governors’ Workshop), 21 November2011, 5 December 2012 (Workshop), 25 and 26 January2012 (Residential Strategic Event), 15 February 2012(Extraordinary Meeting), 26 March 2012, 30 April 2012(Workshop) and 2 July 2012.

The Finance Committee meets at least three times ayear and recommends to the Board of Governors theUniversity’s annual revenue and capital budgets aftergiving consideration to the financial health of theUniversity. It also receives at each meeting reports onthe University’s performance in relation to approvedbudgets, estate related capital investment plans andtreasury management, and a financial report from theLiverpool Students’ Union, which is a separate legalentity. The Chairman of the Finance Committee is MrRod Hill and the Deputy Chairman is Mr GrahamMorris. The Finance Committee met on 31 October2011, 12 March 2012 and 18 June 2012.

The Employment Committee meets at least 3 times ayear and considers issues related to staffing andemployment, including Health and Safety, in theUniversity. The responsibilities of the Committee alsoencompass equality and diversity monitoring and theregulatory aspects of the University’s relationship withthe student body. The Chairman of the EmploymentCommittee is Her Honour E Steel DL and the DeputyChairman is Mr Paul Holme. The EmploymentCommittee met on 17 October 2011, 5 March 2012 and11 June 2012.

The Remuneration Committee, which meets at leastonce a year, considers the performance anddetermines the annual remuneration of the Vice-Chancellor and Senior Officers of the University. TheChairman of the Remuneration Committee is SirMalcolm Thornton. The Remuneration Committee meton 18 June 2012.

The Nominations Committee meets at least once ayear, more regularly if necessary, and considersmembership issues and appointments to vacancies onthe Board for non-executive members. The Committeealso advises the Board of Governors of attendancestatistics on an annual basis and supports anynecessary intervention that the Chairman of the Boardshould make in instances of low attendance. Issuesaround attendance are discussed by the Chairmen ofCommittees as part of performance review meetingswith individual Governors. The Chairman of theNominations Committee is Sir Malcolm Thornton. The

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Nominations Committee met on 3 October 2011, 1November 2011, 6 March 2012 and 29 June 2012.

The Audit Committee, which meets at least four timesa year (five in 2011/12), is responsible for overseeingthe work of the external auditors (currently KPMG) andinternal auditors (currently Deloittes) and considersdetailed reports on the maintenance of the University’ssystems of control, including management reports andimplementation plans and also considers anyrecommendations for improvement of systems andcontrols. The Committee also receives and considersreports from HEFCE as they affect the University’sbusiness, monitors adherence with regulatoryrequirements and reviews the University’s accountingpolicies. Whilst the Vice-Chancellor and othermanagers attend meetings of the Audit Committee asnecessary, they are not members of the Committee.The Committee is empowered to meet any auditors ontheir own for independent discussions should this bedecided to be necessary by either party. In 2010 theTerms of Reference for the Audit Committee werereviewed and amended to take account of the newrequirements within the FM for regulation under theCharities Act 2006 and the specific implications for thework and responsibilities of the Audit Committee. TheTerms of Reference were also amended in 2011 toinclude oversight of the policy on bribery in relation tothe Bribery Act 2010. The FM sets out the formalrelationship between HEFCE and the governing bodiesand designated officers of higher education institutions(HEIs) it funds. It reflects HEFCE’s responsibility toprovide annual assurances to Parliament that: funds arebeing used for the purposes for which they were given;risk management, control and governance in the sectorare effective; and value for money is being achieved.The Chairman of the Audit Committee is Ms DeborahShackleton and the Deputy Chairman was Mrs AlexisRedmond up until the Audit Committee meeting of 7November 2011, and Sir Bert Massie onwards from theAudit Committee of 27 February 2012 to date. TheAudit Committee met on 3 October 2011, 7 November2011, 27 February 2012, 7 June 2012 and 16 July 2012.

In the opinion of the Board of Governors, thegovernance practices of the University are consistentwith the “Guide for Membership of Higher EducationGoverning Bodies in the UK”, published by the CUC inFebruary 2009, and as superseded by the UKCorporate Governance Code in May 2010, with thefollowing exceptions: that in light of the unprecedentedchallenges in the HE sector, it was clearly offundamental importance that the Board should ensurecontinuity, stability and continuing effectivegovernance, and that this need was heightenedexceptionally at LJMU when, during the same period,the critically important succession to the position ofVice-Chancellor and Chief Executive took place. In thisrespect, therefore, it was agreed at the Board ofGovernors Meeting on 20 September 2010 that the

University’s 7 most experienced Governors, (whichincluded the Chairman), defined as those serving intheir (final) third term as at 1 September 2010, wouldbe extended in office by 2 years from the date whentheir individual term of office normally would haveconcluded. Without this action 3 of those Governorswould have completed their final term before 31 July2011 and would have been accordingly unavailable toact in the succession plan and in the transitionaryperiod following the new Vice-Chancellor’sappointment.

The Board of Governors approved the appointment of anew Vice-Chancellor and Chief Executive at its meetingheld on 14 February 2011 and Professor Nigel WeatherillFREng, DSc took up post on 1 September 2011.

In addition, one Audit Committee took place withoutthe criterion being fulfilled for a member of the AuditCommittee to have financial expertise andqualifications. This was an exceptional case due to twomembers of the Audit Committee having resigned tofulfil other commitments. Having assessed the risk ofholding the Committee without this specific expertise,it was decided by the Chairman of the Board and theUniversity Secretary that the meeting should go ahead,noting the agenda concerned did not include anydetailed scrutiny in relation to financial and accountingmatters, and on the basis that the situation should bedeclared and minuted. The skills gap was rectified bythe time the next Audit Committee took place.

During 2009 the Board of Governors conducted an in-depth review of the effectiveness of institutionalgovernance arrangements of the University and madeproposals for forward action. Such an intensiveeffectiveness review is conducted every 4 years withany identified actions/enhancements implemented inthe meantime as and when the need arises. The 2009review determined that there continued to be a highlevel of satisfaction within the Board of Governors andthe Executive with the current governancearrangements within the University, alongside acommitment to self-evaluation and continuousimprovement. The recommendations arising from thereview were implemented during 2009/10. The Boardrecognises that the maintenance of good corporategovernance arrangements is an on-going process and aprogramme of development in governance work wasundertaken and implemented in 2010/11.

2010/11 and 2011/12 was an exceptionally busy periodfor Governors during a time of great change for the HEsector with particular reference to the externalenvironment, including the decision on fees and thesubsequent access agreement.

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Internal ControlThe University’s Board of Governors is responsible forthe University’s system of internal control and forreviewing its effectiveness. The system is designed tosupport the achievement of operational activities and tomanage and limit the risk of failure to achieve policies,aims and objectives.

The system of internal control is based on an ongoingrisk management process designed to identify theprincipal risks to the achievement of the organisation’sobjectives; to evaluate the nature and extent of thoserisks; and to manage them efficiently, effectively andeconomically. It is underpinned by compliance with therequirements of the core standards in:

n Governance

n Financial Management

n Risk Management

Processes and control arrangements

The University has the following processes and controlarrangements in place:

The University remains committed to best practice inGovernance and Management and its aims andobjectives are enshrined in a new strategic frameworkand plan, agreed during the year. The principles ofexcellence underpin the University’s strategy (2012 to2017), which itself is based on the four core themes ofEstablishing and Enhancing the Student Partnership;Excellence in Learning, Teaching and Assessment;Embedding Research and Scholarship; and, Social andEconomic Engagement.

The Strategic Management System requires andensures a regular review of the University’s strategicdirection and performance. Progress against thestrategy is monitored by SMT. The StrategyManagement Director, as a member of SMT, and adedicated Strategy Support Office have specificresponsibility for oversight of the performance anddelivery of the University’s strategy; as well as strategyrelated risk management.

The Board of Governors and the Board’s Committeesreview their terms of reference on a regular basisagainst prevailing conditions, with a view, inter alia, toagreeing how best to maintain risk assessment activityinto their work. The terms of reference for the AuditCommittee were reviewed and amended in November2010 to take into account the new reportingrequirements within HEFCE’s Financial Memorandumfor regulations under the Charities Act 2006, andfurther amended on 3 October 2011 to take account ofnew duties in accordance with the Bribery Act 2010.

From October 2012 the Board of Governors’ agendawill include an explicit standing item for considerationof any relevant risk issue. The Board receives regularreports on risk and the Risk Managementarrangements from SMT and the Audit Committee.

The Internal Audit Plan is derived from a high level riskassessment of the University’s operations inconsultation with University management and theassessment makes detailed reference to the UniversityStrategy Map and Plan, risk register, pipeline ofpossible audits and previous internal audit reports.

SMT and the Audit Committee receive regular reportsfrom internal audit, which include anyrecommendations for development or improvement.Since May 2012, SMT has received the full detail ofaudit reports as they have been completed rather thanas part of a regular reporting schedule towards a Boardmeeting (as previously). Key auditees have alwaysreceived audit reports straight away. The InternalAuditors, who operate to the standards defined in theHEFCE Accountability and Audit Code of Practice,submit regular reports including independent opinionon the adequacy and effectiveness of the system ofinternal control, with any recommendations fordevelopment or improvement.

SMT receives reports setting out key risk indicatorsand considers possible control issues brought to itsattention by early warning mechanisms which areembedded within the operational units.

Risk management is incorporated into the corporateplanning and decision making process of theinstitution. The Risk Management Strategy contains adescription of the institution’s risk appetite, reflectinginformal advice from the University’s internal auditorsand members of the Board with specific expertise inthis area. Following review in the year, the riskmanagement system was enhanced to take account ofa more dynamic external environment and to clarifyand simplify the methodology and scoring process.

Particular indicators of the effectiveness of theinternal control systems during 2011/12.

These include:

1. The most recent overall assessment from theHEFCE Assessment of Institutional Risk, dated 30September 2012, was that LJMU was not at higher riskand was meeting the accountability obligations set outin the Financial Memorandum between HEFCE andInstitutions.

2. The 2011/12 annual assessment statement by theInternal Auditors of the University’s system of internalcontrol, including risk management and governance,reports that ‘Based on the work which we have

undertaken during the year, we are able to concludethat Liverpool John Moores University has a basicallysound system of internal controls, which shouldprovide substantial assurance regarding the effectiveachievement of the University’s objectives’.

3. Assessment gradings for audits in 2011/12 were inthe main either full or substantial. Two audits weregraded as limited assessments. These audits werearranged as support to management in areas whereaction was planned to resolve issues and furtherimprove controls. The Internal Auditors advised thatthey were satisfied that the University wasimplementing the appropriate policies and meeting therecommendations from the internal audit fieldwork.

4. The office of Fair Access (OFFA) approved theUniversity’s Access Agreement, which had beenrecommended by the SMT and endorsed by the Boardof Governors. The Widening Participation StrategicAssessment for OFFA was approved under the samegovernance arrangements.

5. The Board of Governors approved the originalCarbon Management Programme in March 2010,delegating responsibility for ongoing monitoring of theProgramme to the Finance Committee. In so doing theUniversity is demonstrating compliance with HEFCE’srequirement for oversight of the programme by theBoard, and a nominated committee. The University’sCarbon Management Plan is currently 45% inprogression towards achieving its 2015 target. TheUniversity has recently reviewed its committeestructure and a new Estate Committee has been set upwhich, inter alia, will monitor the Carbon ManagementStrategy.

6. An Anti-Bribery Policy was agreed by the Board ofGovernors on 28 March 2011 and implementedthereafter. A Working Group was established toidentify high risk areas and to prepare plans forimplementing the policy. References to the Bribery Act2010 have been included in documents and policiesand a programme of communication about the Act wasdelivered in autumn 2011. Staff are required toundertake an online training module on the Bribery Act2010. An Anti-Bribery Follow Up internal audit hasrecently taken place and was reported at the AuditCommittee in July 2012, receiving an overall substantialassessment. A risk assessment of high risk areas andthe controls in place to counter fraud and preventbribery is to be conducted in October.

7. Policies in relation to Due Diligence, Anti MoneyLaundering and Terrorist Financing, and Gifts andHospitality have been reviewed and where appropriatedeveloped with any changes implemented during theyear.

8. The University continued to implement its agreed

action plan to meet the recommendations of the 2009QAA Institutional Audit in conjunction with an AssistantDirector of the QAA. The final outcome is scheduled tobe announced in Spring 2013.

9. In support of the work being undertaken in respectof the limited confidence outcome of the QAAInstitutional Audit, Deloitte, the University’s InternalAuditors, undertook a review of the end-to-end processof managing collaborative partnerships. The reviewfocused on the overarching framework of governanceand control for strategy setting, development of newcollaborations and the management of existingcollaborations. The proposals remain available for usein the forthcoming review of operations in this area tomeet the objectives in the strategic plan.

10. To support the management of the UKBA HighlyTrusted Status Licence the University engaged theservices of consultants to undertake an audit of bothTier 2 and Tier 4 activity. As a result of the audit theUniversity produced an action plan to ensure that bestpractice processes were fully implemented.

11. During the year the University identified a potentialissue within the Faculty of Health and Applied SocialStudies which required internal investigation andappropriate consultation with relevant externalagencies including UKBA. The decisive managementaction that was taken ensured that the University at notime was in breach of its Highly Trusted Status Licenceand UKBA was satisfied with the pro-active responsesof the University. The University also dealt effectivelywith the HR consequences of the issues that hadarisen.

12. The University has now formally changed theLicence Holder for the HTS Licence to the Registrarand Chief Information Officer. Confirmation has beenreceived from UKBA that the University has maintainedits Category A Sponsor Licence until November 2016,and also that a routine UKBA Audit scheduled forNovember 2012 will not now take place.

13. E-learning modules on data protection andfreedom of information and on diversity in theworkplace have been introduced as essential trainingfor all staff.

14. The University has met the reporting requirementsof both the Freedom of Information Act and the DataProtection Act for the requests received, includinghandling the requests effectively.

15. The University managed its occupational safetyand health risks effectively, having made the requiredprogress against the targets contained in the Healthand Safety Action Plan 2011/12. The OccupationalHealth Unit meets the Faculty of OccupationalMedicine’s service standards, along with the

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University’s statutory requirements and those ofprofessional bodies for students in vocationalprogrammes. There was a slight decrease in thenumber of workplace accidents resulting in minorinjuries. The number of accidents that were reportedto the Health and Safety Executive remained constant(2). The corresponding incidence rate for reportableaccidents per 1,000 staff rose from 0.82 to 0.95, dueto a reduction in staff numbers. The rate is below themost recently published sector rate of 2.36 per 1,000staff in 2011.

16. The number of cases being referred to the Officeof the Independent Adjudicator (OIA) in relation tostudent complaints and appeals continues to be low.In the calendar year 2011, seven complaints wereclosed by the OIA compared with eight in 2010. Of theseven complaints, the OIA decided that four were notjustified, two were partly justified and one wasineligible.

17. A HEFCE audit of the Access to Learning Fundprocesses and procedures was carried out in May2012. The final audit report raised sevenrecommendations for action. The majority of thesehave been addressed during the annual internal policyreview process in the summer of 2012. The finalrecommendations framework document wassubmitted in September.

18. IT decision-making and strategy developmentcontinued to be managed through the InformationGovernance Structure, consisting of the InformationManagement, IT and Development ProgrammeSteering Groups and reporting to SMT through theChief Information Officer as Chair of the InformationManagement Steering Group. An Information SecurityPolicy was progressed through the governancestructure during the year and agreed by SMT in June2012. Other issues identified through the Internal Auditreviews of Date Security and Records Managementand Identity and Access Management are beingaddressed. These audits were requested bymanagement to assist development activity in theseareas.

19. Further developments of the Student InformationSystem were implemented in 2011/12. However, therewere a number of inadequacies which have been thesubject of a review report and considerable input torectify the problems that emerged. Work continues toensure that the system can achieve the functionalityrequired and that staff are supported in using thesystem effectively and realising the benefits that areavailable in the system. Internal Audit has been askedto audit the Student Information System process anddata in 2012/13.

20. It is institutional policy that all requests forsoftware solutions and developments have to be

submitted to the Planning and Information ServiceDesk. Where appropriate these go with a businesscase to the Development Programme Steering Group(DPSG) for consideration. An instance of non-compliance has led to a restatement of the policy.

21. The P2P (Procure to Pay) e-marketplace system - i-procurement and i-buy - has been used within theUniversity since April 2011 and is being rolled outacross all faculties and professional service teams.Currently two faculties and elements of severalprofessional services teams use the system. Theonline system strengthens controls through the use ofworkflow processes over monitoring of budgets andauthorisations of purchase orders and improves theefficiency of purchasing, receipting and invoicematching.

22. The Diamond Report (Efficiency and ModernisationTask Group) from Universities UK (UUK) has set atarget of 30% of Non Pay spending to be achievedthrough collaborative procurement. LJMU is alreadymaking good progress towards this target with 24.1%of influenceable spend through collaborativeprocurement in 2010/11.

23. The Audit Committee conducts a self-assessmentevery 2 years in order to satisfy itself and demonstratethat the Committee is committed to ensuring that it iscontinuing to fulfil its obligations as set out in its Termsof Reference and continuing to find ways of enhancingits effectiveness. The last review was held inSeptember 2012 and the outcome reported to theAudit Committee on 5 November 2012. No issues ofserious concern had been identified from the review.

The Board is of the view that there is an on-goingprocess for identifying, evaluating and managing theUniversity’s significant risks, that it was in place for theyear ended 31 July 2012, that it is regularly reviewed bythe Board of Governors and that it accords with theinternal control guidance for directors on the CombinedCode as deemed appropriate for HE. The RiskManagement Policy and Framework has recently beenupdated to reflect and align closely with the newStrategic Framework 2012/17.

Going Concern

After making appropriate enquiries, the Board ofGovernors considers that the University has adequateresources to continue in operational existence for theforeseeable future. For this reason the Boardcontinues to adopt the ‘going concern’ basis inpreparing the financial statements.

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INDEPENDENT AUDITOR’S REPORT TO THEBOARD OF GOVERNORS OF LIVERPOOOLJOHN MOORES UNIVERSITY

We have audited the group and University financialstatements (the ‘‘financial statements’’) of LiverpoolJohn Moores University for the year ended 31 July2012 which comprise the Group Income andExpenditure Account, the Group and University BalanceSheets, the Group Cash Flow Statement, the GroupStatement of Total Recognised Gains and Losses andthe related notes. The financial reporting frameworkthat has been applied in their preparation is applicablelaw and United Kingdom Accounting Standards (UnitedKingdom Generally Accepted Accounting Practice).This report is made solely to the Board of Governors, inaccordance with paragraph 13(2) of the University'sArticles of Government and section 124B of theEducation Reform Act 1988. Our audit work has beenundertaken so that we might state to the Board ofGovernors those matters we are required to state to itin an auditor’s report and for no other purpose. To thefullest extent permitted by law, we do not accept orassume responsibility to anyone other than the Boardof Governors for our audit work, for this report, or forthe opinions we have formed.

Respective responsibilities of the Board ofGovernors and auditorAs explained more fully in the Statement ofResponsibilities the Board of Governors on page 35 theBoard of Governors is responsible for the preparation offinancial statements which give a true and fair view. Ourresponsibility is to audit, and express an opinion, on thefinancial statements in accordance with applicable lawand International Standards on Auditing (UK and Ireland).Those standards require us to comply with the AuditingPractices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amountsand disclosures in the financial statements sufficient togive reasonable assurance that the financial statementsare free from material misstatement, whether caused byfraud or error. This includes an assessment of: whetherthe accounting policies are appropriate to the groups andUniversity’s circumstances and have been consistentlyapplied and adequately disclosed; the reasonableness ofsignificant accounting estimates made by the Board ofGovernors; and the overall presentation of the financialstatements. In addition, we read all the financial and non-financial information in the Operating and FinancialReview to identify material inconsistencies with theaudited financial statements. If we become aware of anyapparent material misstatements or inconsistencies weconsider the implications for our report.

Opinion on financial statementsIn our opinion the financial statements:• give a true and fair view of the state of the affairs

of the Group and University as at 31 July 2012 and of the Group’s income and expenditure, recognised gains and losses and cash flows for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the Statement of Recommended Practice – Accounting for Further and Higher Education.

Opinion on other matters prescribed in the HEFCEAudit Code of Practice issued under the Further andHigher Education Act 1992In our opinion, in all material respects:• funds from whatever source administered by the

University for specific purposes have been properly applied to those purposes

• funds provided by HEFCE have been applied in accordance with the Financial Memorandum and any other terms and conditions attached to them.

Matters on which we are required to report byexception We have nothing to report in respect of the followingmatter where the HEFCE Audit Code of Practice issuedunder the Further and Higher Education Act 1992requires us to report to you if, in our opinion:• the statement of internal control included as part

of the Corporate Governance Statement is inconsistent with our knowledge of the University and group.

Stephen ClarkFor and on behalf of KPMG LLP, Statutory AuditorChartered Accountants St James’ SquareManchester M2 6DS

Date: 23/11/2012

The maintenance and integrity of the Liverpool JohnMoores University website is the responsibility of theBoard of Governors; the work carried out by theauditors does not involve consideration of thesematters and, accordingly, the auditors accept noresponsibility for any changes that may have occurredto the financial statements since they were initiallypresented on the website.

Legislation in the United Kingdom governing thepreparation and dissemination of financial statementsmay differ from legislation in other jurisdictions.

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STATEMENT OF PRINCIPAL ACCOUNTINGPOLICIES

Basis of preparationThese financial statements have been prepared inaccordance with the statement of recommendedpractice (SORP – 2007): Accounting for Further andHigher Education Institutions and in accordance withapplicable accounting standards.

Basis of accountingThe financial statements have been prepared under thehistorical cost convention, modified by the revaluationof certain land and buildings.

Basis of consolidationThe consolidated financial statements include theUniversity and its subsidiary undertakings for thefinancial year to 31 July 2012. Intra-group sales andpurchases are eliminated fully on consolidation. Inaccordance with FRS2, the activities of the StudentsUnion have not been consolidated because theUniversity does not control nor have significantinfluence over their managerial and financial policydecisions.

Recognition of incomeIncome from research grants, contracts and otherservices rendered is included to the extent of thecompletion of the contract or service concerned. Thisis generally equivalent to the sum of the relevantexpenditure incurred during the year and any relatedcontributions towards overhead costs. All income fromshort-term deposits is credited to the income andexpenditure account in the period in which it is earned.

Income from specific endowments and donations isincluded to the extent of the relevant expenditureincurred during the year, together with any relatedcontributions towards overhead costs.

Recurrent grants from the Funding Council arerecognised in the period in which they are receivable.

Non-recurrent grants from Funding Council or otherbodies received in respect of the acquisition orconstruction of fixed assets are treated as deferredcapital grants and amortised in line with depreciationover the life of the assets.

Pension schemesThe three pension schemes for the University's staffare the Teachers Pension Scheme (TPS), UniversitiesSuperannuation Scheme (USS) and the MerseysidePension Fund (MPF). The schemes are defined benefitschemes, which are externally funded and contractedout of the State Earnings-Related Pension Scheme. TheFunds are valued every five years (TPS) by actuariesusing the entry age method, or three years (MPF andUSS) by actuaries using the projected unit method, therates of contribution payable being determined by the

trustees on the advice of the actuaries. Pension costsare assessed on the latest actuarial valuations of theSchemes and are accounted for on the basis ofcharging the cost of providing pensions over the periodduring which the institution benefits from theemployees' services. Variations from regular cost arespread over the expected average remaining workinglifetime of Members of the Schemes after makingallowances for future withdrawals.

Tangible fixed assets

a. Land and buildingsLand and Buildings are stated at valuation. The basis ofvaluation is either open market value for existing use ordepreciated replacement cost. CB Richard Ellis,Chartered Surveyors, revalued the freehold andleasehold land and buildings at 30 June 2010.Valuations normally take place every 5 years. Freeholdland is not depreciated. Buildings are depreciated overtheir expected useful lives of 50 years and leaseholdbuildings over the life of the lease. Assets in thecourse of construction are not depreciated.

Where buildings are acquired with the aid of specificgrants they are capitalised and depreciated as above.The related grants are treated as deferred capitalgrants and released to income over the expecteduseful life of the buildings.

b. Maintenance of premisesThe cost of routine corrective maintenance is chargedto the income and expenditure account in the period inwhich it is incurred.

c. TelescopeThe Liverpool Telescope has been capitalised at costand is being depreciated over 20 years.

d. EquipmentEquipment, including computers and software, costingless than £10,000 per individual item, or group ofrelated items, is written off to the income andexpenditure account in the year of acquisition. Allother equipment is capitalised at cost and depreciatedover 4 years.

From 1st August 2012 the University has changed itsaccounting policy with regard to Equipment. The valueat which equipment will be capitalised from this date is£5,000, reduced from £10,000.

Where equipment is acquired with the aid of specificgrants it is capitalised and depreciated in accordancewith the above policy, with the related grant beingcredited to a deferred capital grant account andreleased to the income and expenditure account overthe expected useful life of the equipment.

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e. LeasesFixed assets held under finance leases and the relatedlease obligations are recorded in the balance sheet atthe shorter of the fair value of the leased assets at theinception of the lease or the life of the asset asappropriate. The excess of lease payments overrecorded lease obligations is treated as finance charges,which are amortised over each lease term to give aconstant rate of charge on the remaining balance of theobligations.

Rental costs under operating leases are charged toexpenditure in equal annual amounts over the period ofthe leases.

InvestmentsFixed asset investments that are not listed on arecognised stock exchange are carried at historical costless any provision for impairment in their value.

Current asset investments are included at the lower oftheir original cost and net realisable value.

StocksStocks are valued at the lower of their cost and netrealisable value. Where necessary, provision is made forobsolete, slow moving and defective stocks.

Taxation statusThe University is considered to pass the tests set out inParagraph 1 Schedule 6 Finance Act 2010 and thereforeit meets the definition of a charitable company for UKcorporation tax purposes. Accordingly, the University ispotentially exempt from taxation in respect of income orcapital gains received within categories covered byChapter 3 Part 11 Corporation Tax Act 2010 or Section256 of the Taxation of Chargeable Gains Act 1992, to theextent that such income or gains are applied exclusivelyto charitable purposes. Subsidiary companies are liableto corporation tax.

The University is partially exempt in respect of ValueAdded Tax, so that it can only recover a minor elementof VAT charged on its inputs. Irrecoverable VAT oninputs is included in the costs of such inputs and addedto the cost of tangible fixed assets as appropriate,where the inputs themselves are tangible fixed assetsby nature.

The University’s subsidiary companies with theexception of JMU Building Services and MaintenanceLtd (which has the same taxation status as theUniversity) are subject to corporation tax and VAT in thesame way as any commercial organisation.

Cash flows and liquid resourcesLiquid resources include sums on short-term depositswith recognised banks and building societies andgovernment securities.

ProvisionsProvisions are recognised when the University has apresent legal or constructive obligation as a result of apast event, it is probable that a transfer of economicbenefit will be required to settle the obligation and areliable estimate can be made of the amount of theobligation.


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annual report andfinancial statementsfor the year ending 31 July 2012

Documents

Transcript of annual report andfinancial statementsfor the year ending 31 July 2012