Total income increased in the year by 15%/£3.5m to £26.8m.
This was mainly due to £3.3m higher investment income. Membership subscription income grew by 7% to £8.7m (2022: £8.2m). Overall Membership numbers at year end grew by 1.9% to 57,561* (2022: 56,486). Trading income has reduced by 7% to £6.6m, (2022: £7.1m) *Student numbers will be validated during 2024.
Total expenditure on ordinary activities decreased by £2.7m in the year to £28.5m.
Three large contributors to the cost reduction were a reduction of £341k in the Cost of Raising Funds, a reduction of £572k support costs under the Competence Charitable Activity and a reduction of £681k support costs under the Confidence Charitable Activity. A reduction in Defined Benefit Pension finance costs including actuarial remeasurements, accounted for £1.3m of the cost reduction. Staff Full Time Equivalents dropped from 258 to 250 with a corresponding reduction in Total Staff Costs of £445k.
However, due to gains in relation to our investments, the net movement in funds improved from a £10.1m adverse figure in 2022 to a £1.8m favourable figure in 2023.
In addition, 澳门王中王’s strong balance sheet including £124m of investment funds (2022, £114m) and Heritage Assets, valued at £266m offer opportunities to contribute directly to funding the House of Architecture programme and leveraging the Collection for fundraising purposes.
Income (i.e. Where 澳门王中王’s money comes from)
澳门王中王 is a UK–registered charity, set up under Royal Charter. It is a membership organisation with strong commercial businesses and a large investment fund, helping it contribute to central operating costs and future investment plans.
澳门王中王 received a Total Income of £26.8m (2022: £23.2m); this figure represents all the income received. The Total Income in 2023 excludes a £3.2m unrealised gain on investment holdings and a £379k actuarial gain on the defined benefit pension scheme.
Within the £26.8m Total Income figure, £8.8m was generated from individual membership subscriptions (2022, £8.2m). The main contributor to this increase in income was from an approved subscription fee rise in 2023.
£6.6 million came from other trading activities (2022, £7.1m), which includes income generated by the Venues business based in 澳门王中王’s headquarters building at 66 Portland Place, commercial income, publishing income and retail income.
Other Charitable activities (i.e. other than subscription and trading income) generated £6.1m (2022: £5.8m) income. This income has been allocated to one of the three groupings of strategic priorities of the Institute, although only two of these areas generated income in 2023. Examples of income in respect of each of these are below:
Competency (Education, Research, Knowledge, and Data)
- Competitions and publications, Continuing Professional Development (CPD) courses, CPD Providers Network, and 澳门王中王 Chartered Practice.
Confidence (Advocacy, Policy and Influence D&I, Culture)
- Talks and lectures, architecture festivals, design reviews and the Awards programme, 澳门王中王pix sales, and royalty income.
Donations and legacies contributed £0.2m income (2022: £0.2m).
Investment income (interest received and dividends) of £5.1 million was received in 2023 (2022: £1.8m). As in other charities, the funds are managed professionally in diversified portfolios.
Expenditure (i.e. how 澳门王中王 spends its money)
Total expenditure excluding pension finance costs during the year was £28.1m (2022: £29.5m).
Expenditure on raising funds is effectively the costs of running 澳门王中王’s commercial operations which generate the trading income explained above. Total expenditure on raising funds was £6.1m (2022: £6.4m).
Expenditure on charitable activities, like income, is allocated to one of the three strategic priorities. The chart on page 48 shows more specifically where the £22.0m (2022: £23.1 million) has been spent.
Expenditure on pension finance costs were £0.4m (2022: £1.7m), these directly offset with a £0.4m gain on the scheme.
Gains and losses
The listed investments held by 澳门王中王 generated a £3.2m unrealised net gain due to market fluctuations (2022: £3.8m unrealised net loss). The Investments Fund has been set up with performance targets and diversification to reduce its market value volatility over the medium term, whilst allowing investment income to be used to help fund charitable activities.
Pension scheme funding reserve
澳门王中王 operates a defined contribution pension scheme whereby it pays a percentage of employees’ salaries into a pension scheme and has no further liability. However, historically, like many employers, it provided a defined benefit (or final salary) pension scheme to its employees, whereby the pension received relates to the number of years’ service and the salary paid on leaving the company’s employment. Although this latter scheme was closed to new employees back in 1994 and now has no active members, it is subject to fund value volatility.
Note 25 shows that the actuarial valuation provides a £9.7m surplus (2022 £9.5m) resulting in an overall actuarial valuation that is capped to £0m (2022: £0m capped).
The Financial Reporting Standard (FRS102) governs some of the assumptions used and how the information is presented, in an attempt to take out any subjectivity in the numbers. However, this is unnecessarily complex and valuations can fluctuate from year to year. The most important point to note is that every three years, the Trustees of the 1974 Pension Scheme reach an agreement with 澳门王中王 Trustees on the valuation of the surplus or deficit, using a set of assumptions agreed by both parties and jointly establish a contribution (or deficit funding) schedule.
The last full triennial valuation of the scheme, as at 31 December 2022, valued the surplus at £4.5m. The next full triennial valuation will be prepared as at 31 December 2025. The actuarial movement on the defined benefit pension scheme was a £0.4 m gain (2022: £1.7m gain), the fund is still in surplus.
Net movement in funds
Overall, the net movement in funds during the year was a £1.8m surplus (2022: £10.1m deficit).
Balance sheet
The Balance Sheet, shows the value of 澳门王中王’s assets as at 31 December 2023, the last day of the accounting year. The net assets of 澳门王中王 have increased by £1.8 m during the last twelve months, to £404.7m (2022: £402.9m). The vast majority of the value in the balance sheet is not readily accessible to 澳门王中王, as reflected in the reserves policy with £383.6m held in designated funds (2022: £394.7m).
The most significant item is the value placed upon 澳门王中王’s cultural (or heritage) assets comprising drawings, paintings, busts, books, periodicals, photographs and other archives (see note 12). Whilst the balance sheet includes the value of the materials in the 澳门王中王 Collections, this does not mean that either this value could be realised or that the material in the collections could be sold. Conditions relating to the original acquisition of material by 澳门王中王 going back to 1834, 澳门王中王’s standing as a cultural organisation, and its need as an accredited museum to follow the Museums Association’s Code of Ethics relating to disposal (which presumes against any financially motivated disposal), mean that disposal of any parts of our collection by sale is not possible.
A heritage asset is defined as “a tangible asset with historical, artistic, scientific, technological, geophysical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture”. The value placed on such assets as at 31 December 2023 is £266.5 m (2022: £266.5 m) and this is a significant figure which clearly dominates the balance sheet. There is no doubt that 澳门王中王 has a world–renowned collection of great architectural significance. The Trustees have a duty to protect these assets, which have been acquired by 澳门王中王 either through donation or by acquisition since its formation in 1834. 澳门王中王 considers itself responsible not only for ensuring the continued preservation of the archives and collections for future generations, but for making them available to a wider audience. The House of Architecture programme includes plans to improve public accessibility.
Other investments of £124.1m (2022: £113.9m) include both restricted and unrestricted investments. £111.5m of this is held in an Investment Fund that was created in 2021 from the proceeds of the sale of Williams TopCo Ltd; Note 15 provides further information.
澳门王中王 has total debtors of £3.1m (2022: £2.8m), which includes amounts owed from sponsors, customers and 澳门王中王 members, in addition to prepayments and accrued income.
澳门王中王 has total creditors within one year of £6.6m (2022: £7.9m), which includes amounts owed to suppliers and accrued expenditure.
Cash flows
During the year there was a net decrease in cash of £0.7m which reduced cash and cash equivalent holdings at the year end to £3.0m (2022: £0.7 m decrease to £3.7m).
Basis of preparation
The financial statements have been prepared on the basis of the accounting policies set out in note 1 to the financial statements and comply with the Royal Charter, applicable law and the requirements of the Statement of Recommended Practice, ‘Accounting and Reporting by Charities’ revised and issued in July 2014.
Going concern
The financial statements have been prepared on the basis that 澳门王中王 has adequate resources to continue in operational existence for the foreseeable future (going concern basis), with assets and liabilities recognised as they will be realised and discharged in the normal course of business. In support of this assumption, the Investment Fund valued at £124.1m provides enough funding to cover any financial uncertainties over the twelve months following accounts signing and beyond. Given the size of the investment fund, the trustees have concluded that the entity is a going concern.
Risk management
In July 2023, a Head of Risk, Planning and Performance was appointed to improve the management of risk within 澳门王中王. This role was created to ensure risks are identified, monitored and mitigated against in a timely and objective manner. As a result, the Executive Team undertook a comprehensive review of their identified set of strategic risks, moving away from a set of narrow and unfocussed risks, to a clear and cohesive Strategic Risk Register, linked to business priorities and strategic objectives. This review was undertaken with advice from the Audit and Risk Committee and 澳门王中王’s Internal Auditors.
Towards the end of 2023, 澳门王中王 began the process of identifying risks for the House of Architecture programme. These focussed on governance arrangements, ensuring the programme is structured properly, effective decision making takes place and the programme is delivered on time. These change management risks, if not managed, would compromise 澳门王中王’s ability to deliver its strategic aims.
Each strategic risk is owned by a member of the Executive Team and they are regularly reviewed by the Executive Team, 澳门王中王 Board, and Audit and Risk Committee.
The resulting strategic risk register consisted of strategic risks with various risk mitigations covering the following risk categories:
- Economic
- People
- Reputational
- Political
- Technological
The degree of risk is measured by considering likelihood and impact. To describe our appetite for each category of risk, the Executive Team sets the minimum ‘residual risk’ ratings it expects to achieve once the suite of mitigations have been delivered.
We regularly assess our operating environment based on the categories listed above and will add or remove risks along with associated mitigations as required. As far as possible, we incorporate risk mitigations into our business–as–usual activities, reinforcing the message that risk management is the responsibility of all staff. Short and medium–term additional governance structures are introduced for high– value projects and programmes as appropriate.
澳门王中王 is satisfied that we manage and mitigate risks, and where necessary, that we take action to contain the impact of risk. We are confident that our risk management approach has been comprehensive, allowing the Executive Team to identify early, and respond to, any possible threats to ensure the achievement of our objectives.
Investment policy
Lane Clark Peacock LLP advise 澳门王中王 on its investment policy for the Investment Fund. The overriding intention is for the Investment Fund to maintain its value in real terms, whilst also producing enough returns to help 澳门王中王 remove its current deficit. All investments managers appointed go through a selection programme that also required the Ethical Social and Governance aims of 澳门王中王 to be fulfilled.
澳门王中王’s investment policy is based on guidance from the 澳门王中王’s investment managers with regard for fund restrictions. The main investment policy objectives are to maintain the earning value of the capital, so that the value of the sum available for disbursement is maintained. This will ensure that the risk–adjusted returns are maximised.
澳门王中王 defined benefit pension scheme has a separate investment strategy overseen by the pension scheme trustees, who are an independent body.
Reserves policy
All charities need to have reserves to underwrite their day– to–day activities. The level of reserves held is a matter of judgement for the Trustees, who have decided to take a risk–based approach to determining the level of reserves required, based on their understanding of the business model faced by the Charity. The target level for unrestricted general reserves has been assessed after considering the following key factors:
- Reliability of its income, and;
- Flexibility of its costs in terms of whether they are fixed or variable.
The target for general reserves at the end of 2023 remains between £3m and £5m. The level of general reserves at the end of the year was £14.4m, following the sale of the 76 Portland Place property (2022: £1.7m).
The Heritage Assets reserves show the value of Donated Heritage assets that 澳门王中王 holds is £265.7m as at December 2023 (2022: £265.7m). Whilst the balance sheet includes the value of the materials in the 澳门王中王 Collections, this does not mean that either this value could be realised or that the material in the collections could in fact be sold. Conditions relating to the original acquisition of material by 澳门王中王 going back to 1834, 澳门王中王’s standing as a cultural organisation, and its need as an accredited museum to follow the Museums Association’s Code of Ethics relating to disposal (which presumes against any financially motivated disposal) mean that disposal of any parts of our collection by sale is effectively not possible.
The fixed assets reserve covered the capitalised lease and associated capital costs of 76 Portland Place. After sale of the asset, this reserve became unrestricted general reserves.
The investment fund reserve was created after the sale of Williams TopCo Ltd. which generated £112.7m cash proceeds. It is valued at £111.5m at the end of December 2023 (£110.5 m 2022). The intention of the fund is to provide 澳门王中王 with a new perpetual income stream through investment returns that will be used to support the cultural programme of activities and other high priority activities. The Financing Policy provides further details and is available on 澳门王中王’s website.
The revaluation reserve was created in 1987 for a revaluation of 66 Portland Place, as described further in note 22a.
The level of reserves held provides comfort that 澳门王中王 will remain in a strong financial position as discussed more in the going concern note. As at the end of 2023 the level of unrestricted reserves held were:
| 2023 | 2022 | |
| £'000 | £'000 | |
| Revaluation reserves | 6,380 | 6,444 |
| Heritage assets reserves | 265,740 | 265,711 |
| Fixed assets reserve | 12,000 | |
| Investment fund | 111,496 | 110,546 |
| General reserves | 14,404 | 1,771 |
| Total unrestricted funds | 398,020 | 396,472 |
Fundraising
Supporters of 澳门王中王 are a key element in the fundraising activities, including supporting the House of Architecture programme and we are committed to employing a transparent and ethical approach to all our fundraising activities.
To help guarantee the availability of continuing funds to support the work of 澳门王中王, we aim to maintain a broad base of funding sources. 澳门王中王 invites contributions from funders but does not pressure supporters to make gifts. It respects any funder鈥檚 decision to stop giving. The regulatory landscape for fundraising is evolving and we will continue to monitor and adapt with these changes, as we did with the introduction of General Data Protection Regulation in 2018.
No professional fundraisers or commercial participators were used to approach individuals on behalf of 澳门王中王 in 2023. As at 31 December 2023, one complaint was received by the Fundraising Regulator; this was addressed immediately and subsequently closed.
Structure
澳门王中王 was incorporated by Royal Charter (its Trust Deed, by which it is governed) in 1834 and was registered as a Charity on 14 August 1962 (Registration Number 210566). A list of current Trustees is included on page 107, together with a list of principal advisors.
Throughout 2023, 澳门王中王 had two main subsidiary companies, 澳门王中王 1834 Ltd and 澳门王中王 Financial Services Ltd.
In 2023 the 澳门王中王 Membership Experience UK teams based in the North, Central, South, London and Wales, provided governance and support to 11 regions formed of a network of over 90 澳门王中王 affiliated branches and groups.
Governance
The Board of Trustees is responsible for the management of 澳门王中王鈥檚 business and are the charity trustees of 澳门王中王. The Board of Trustees works closely with the Council, which is made up of elected representatives of the membership, and the Executive team, headed by the CEO, to whom the day鈥� to鈥揹ay management of the charity is delegated.
There are up to 12 trustees, the majority of whom must be Council Members. Trustees may, but are not required to be, Chartered Members of 澳门王中王. The President, Honorary Secretary and Honorary Treasurer are Trustees ex officio. The additional nine trustees are appointed by Council, following recommendations from the Nominations Committee. 澳门王中王 Board members generally serve an initial three鈥搚ear term and may be appointed for further three鈥搚ear terms.
The role of the Council is to be the representative body of the membership of 澳门王中王, to provide strategic advice and guidance to the Board and to hold the Board to account. There are up to 51 澳门王中王 Council Members in total during any session (from 1 September to 31 August). Council Members are elected by 澳门王中王 members as stated in the Regulations. Council Members generally serve an initial three鈥搚ear term and may be appointed for further three鈥搚ear terms.
Board and Council may delegate elements of their respective functions, decision鈥搈aking authority and the implementation of agreed activities to committees, advisory groups and/ or individuals. Board has two mandatory committees 鈥� the Audit & Risk Committee, which reports to both Council and Board, and the Remuneration Committee. Council also has two mandatory committees 鈥� the Standards Committee and the Nominations Committee.
In October 2023, 澳门王中王 commenced a comprehensive review of the effectiveness of its governance which will see 澳门王中王 committed to updating its governance framework during 2024. 澳门王中王 has begun reviewing long鈥搕erm changes to its Charter and Byelaws. Subject to Privy Council approval, 澳门王中王 is working towards implementing these long鈥搕erms changes during 2025.
Members volunteering
An estimate of the total time given by volunteers to further 澳门王中王鈥檚 charitable activities indicates that over 40,000 hours (excluding travel time) were freely given by our members. This reflects very well on all of our members (and others) who give up their time in a wide variety of ways to support 澳门王中王 at all levels and promote architecture to the public.
Management
澳门王中王鈥檚 Chief Executive has a number of delegated powers and reports directly to the 澳门王中王 Board. From 1 January 2023 and through to 8 January 2023, the Chief Executive responsibilities were held by Adrian Dobson and Pamela Harding, before Valerie Vaughan鈥揇ick was appointed as the new Chief Executive Officer on 9 January 2023.
Remuneration policy
澳门王中王鈥檚 Board sets the pay of the Chief Executive, based on independent benchmarking advice. The Executive Directors鈥� pay is also independently benchmarked and determined by the Chief Executive and Remuneration Committee where appropriate. Any changes to the remuneration of other posts are made in accordance with internal remuneration policy and procedures. The annual pay review was determined by the 澳门王中王 Board.
Equity, diversity, and inclusion
澳门王中王 continues to be committed to ensuring that we have an equitable, diverse and inclusive workplace where all visible and invisible differences are valued, accepted and respected. We have four active employee EDI communities supporting our work in this area and helping to embed progress.
We are continuing our focus on building a more inclusive and equitable culture so that all of our colleagues feel welcome, valued and included. We are delivering on our aims to reduce our gender and ethnicity pay gaps but recognise we still have work to do to close them completely. We have five active employee inclusion and diversity communities supporting our work in this area and helping to embed progress.
Engagement with employees
We employ a number of methods to engage with colleagues, supported by a range of communication channels.
A combination of in鈥損erson and virtual meetings were held with all colleagues on a regular basis, led by the leadership team and featuring presentations by representatives from across the organisation, plus live Q&As. 鈥楰nowledge Exchange鈥� sessions were also programmed and open to all colleagues, as an opportunity to share updates and insight into the work of specific teams.
Our communication channels include a regularly updated intranet, fortnightly e鈥搉ewsletters, an organisation鈥搘ide messaging channel on Microsoft Teams, and organisation鈥� wide emails for key updates. An email was sent to all employees each day to highlight news stories impacting 澳门王中王 and the wider architecture profession.
Colleague Representatives (鈥楻eps鈥�) were appointed in 2022, with each member representing a different area of the organisation. Reps have the opportunity to share colleague feedback at regular meetings and make suggestions to the leadership team on potential opportunities to improve the colleague experience and engagement.
Every employee was required to have an Individual Activity Plan, with clear objectives. Exceptional performance against the organisation鈥檚 values was recognised and celebrated at our twice annual awards ceremonies.
Statement of the trustees鈥� responsibilities
The Trustees are responsible for preparing the Trustees鈥� report and the financial statements in accordance with applicable law and the Financial Reporting Standard applicable in the UK and Republic of Ireland (Financial Reporting Standard 102).
The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and the Group and of the incoming resources and application of resources of the Group for that period.
In preparing these financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently
- observe the methods and principles in the Charities SORP
- make judgements and estimates that are reasonable and prudent
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Trustees are responsible for the maintenance and integrity of the charity and financial information included on the Charity鈥檚 website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Trustees鈥� annual report has been approved by the Trustees and signed on their behalf by:
