Annual Accounts and Reports Report to the Annual General Meeting of Members Kris Murali November 2014 Good Morning

Financial Headlines 2013/14 Excluding the NAS-Academies Trust Total Income of £93.4m (Prior Year £92.3m) +1% Income & Expenditure deficit of -£0.2m (Prior Year Surplus £1.0m) Capital spend £Xm for year (Prior Year £6.6m) Overall despite making a small loss last year was generally good. The main challenges related to the situation at the Broomhayes and Anderson Schools. Where the decision was made in October 2013 to close the Education aspect of Broomhayes and turn it into a residential Adult Service. Despite the loses at these two services, strong performance at Daldorch/ Catrine Bank and a number of other Services enabled the losses at Broomhayes and Anderson to be largely contained. The NAS still faces an increasingly challenging financially environment as austerity cuts continue to impact on Local Authorities. [1] Overall income has stabilised and there was a 1% increase, however, this masks underlying growth in the number of people supported in Adult Services and Charitable Activities. There was a reduction in the number of children in Schools, plus the impact of the issues at Broomhayes and Anderson Schools resulting in a reduction of schools income of £1.3m [2] Last Year(2013/14) was the first year the NAS increased fee by 2% in Residential services for three years. In Schools we largely achieved the increase, although in Adult Services the response was ultimately mixed. [3] During the year we also spent £Xm on capital items.

Total Income Overall income has grown by 1.2% and is £2.1m more than in 2010/11, after slightly falling in 2011/12. This is despite the fall in Schools Income of £1.3m compared to the previous year, underlying Adult Services income is continuing to grow

2013/14 Income Details Social Support Services and Education Services continue to be our major income generators representing over 87% of society’s income, there was a reduction of 1% in dependency on fees in 2013/14 as trading income increase slightly as a %from 3% to 4%. Fundraising net income was slightly up compared to last year a good result in a challenging environment.

Total Expenditure Expenditure meanwhile has increased by 2.4%, due to expanding Adult Services and Charitable Services; and also the impact of non-pay inflation. In July 2013 the NAS went through the process of Pensions Auto Enrolment which has resulted in about 1,400 staff joining our defined contribution auto-enrolment pension scheme.

2013/14 Expenditure Details As an organisation providing direct social care, Staff Costs remains our largest category of expenditure, and it is in this area that the Board and Executive are focusing their attention to reduce overall costs. The Board have agreed a new Terms and Conditions Review to be implemented from 2014/15. However there is a Value for Money agenda to see how other areas of cost can be reviewed to ensure VFM and Best Value is achieved.

Split of Staffing across NAS This shows that the vast majority of our staff (87%) work in Schools and Adult Services. 7% of staffing in in the Centre for Autism and 4% employed in supporting services including the Executive Office, Finance, IT, Property, HR etc.

Surplus Last year was the first year there was a deficit after three years of surpluses. The deficit was incurred mainly as a result of the underperformance of Broomhayes and Anderson Schools, which whilst compensated for by a combination of better performance at a number of services and measures to cut maintenance expenditure and other costs in the second half of the year, these measures were just short of what was needed to avoid an overall marginal deficit. Unlike the previous years when there has been a charge against the surplus in respect of the increasing deficit in the Local Government Pension Scheme, this year as a result of the revaluation of the scheme there was a net surplus from the Defined Benefit Pension Schemes.

Total Cash Balances Since the banking crisis we have been more prudent with our cash investment. Our cash position has reduced by £1.4m to £11.1m. The decrease was partly as a result of creditors decreasing compared to debtors resulting is a cash outflow together with moving from £1m surplus to £0.2m deficit. , this was partially the result of the previous capital programme.

Capital Spend We spent £1.6m on capital projects in the year, there were no major projects, £350k was spent on IT investment in line with the agreed IT strategy and £1/4m each on Somerset Court and Sybil Elgar School, the Sybil Elgar School was partly externally fundraised for.

Free Reserves During 2011/12 there was a strategic review of the level of free reserves the NAS needed to hold for a buffer against risk. This was set at £8m for 2012/13. However due to the reduced surplus for the year as well as the level of capital expenditure it has not been possible to achieve this target and indeed the Free Reserve has dropped. The Board at its October 2013 meeting agreed that it would aim to increase reserves when possible to the limits outlined in the Reserves Strategy, but as an absolute minimum they should not drop below £5.3m. In 2013/14 it has been possible to put £1m back into reserves partly as a result of the improvement in the LGPS Pension Funds. The NAS continues to do all it can to build the Free Reserve back to the minimum £8m limit previously agreed.

2014/15 Forecast The Budget for 2014/15 was a surplus of £1.336m, the new forecast for 2014/15 is a surplus of £637k. Main Headlines: [1]Fundraising Income reduced by £672k [2]Schools and Adult Services improved by £404k [3]Increased take up of Pensions £150k Proposals to increase Surplus [1]Reduce Maintenance for 4 months [2]Rephasing investments in IT Projects [3]Release two Balance Sheet Funds The Forecast for 2014/15 went to Plans and Resources Committee last Thursday, it projected an operational surplus for the year of £637k, due to primarily reduced fundraising income and increased pensions costs partially offset by improved performance of schools and adult services. Measures have been recommended to help mitigate the impact of the overspend including [1]Reduce Maintenance for 4 months, [2]Rephasing investments in IT Projects and [3]Release two Balance Sheet Funds

NAS-Academies Trust NAS-AT first full financial year 2013/14, NAS-AT year is academic but converted to NAS financial year in Statutory Accounts National Autistic Society - Academies Trust 2013/14 Income - Fees 677 - Other 4275 Expenditure 585 Surplus 4367 Cash 541 Value of Fixed Assets 4031 Restricted Reserves 456 Pension Deficit -95 This is the first time that the NAS-AT has been reported alongside the NAS. THE NAS-AT currently manages the Thames Valley School in Reading and is working to open the Church Lawton School near Macclesfield, Cheshire in January 2015. The other income received by the AT is capital grants towards the building costs of TVS. It needs to be noted that under the Funding Agreement any surplus by the schools are ringfenced to be used for the benefit of their immediate community and not for use by the NAS. This is not unreasonable as the capital and start-up cost of the schools are funded directly by the Government and not the NAS

An ambitious growth agenda More Schools More Adult Svcs More Branch and member support More enterprising