Newcastle University
The University’s charitable status: a report to Council 2012-13
Charity status
Newcastle University is an exempt charity under the terms of the Charities Act 2011. The Higher
Education Funding Council for England (HEFCE) is the principal regulator for most English higher
education institutions and is our principal regulator.
The University has a number of obligations under Charity Law and this report has been prepared to
assure Council, who are legally the trustees of the University, of the University’s compliance with
these obligations.
Public benefit statement
HEFCE requires HEI to publish an annual statement to say that their trustees have had regard to the
Charity Commission's guidance on public benefit. HEFCE’s guidance is that this statement could
appear in the corporate governance section of the financial statements and related reports.
Alternatively, it could be included in the Operating and Financial Review (OFR) or in a separate public
benefit section of the financial statements and related reports.
The required disclosures have been made in a separate public benefit statement in the OFR
(pages 8-9).
Transactions with trustees
HEFCE's requires exempt-charity HEIs to include in their audited financial statements 'information
about payments to or on behalf of trustees, including expenses; payments to trustees for serving as
trustees (and waivers of such payments); and related party transactions involving trustees.' HEFCE
consider that these disclosures will enable HEIs' trustees to demonstrate transparency and reduce
reputational risk and are consistent with HEFCE’s duty to promote compliance by trustees with their
obligations under charity law.
The required disclosures are included in Note 31 of the financial statements.
Serious incidents
HEIs must report serious incidents to HEFCE at the time when they are identified. A serious incident
is one which has resulted in, or could result in, a significant loss of funds or a significant risk to a
charity's property, work, beneficiaries or reputation.
Executive Board considers no reportable serious incidents occurred during 2012-13.
Connected charities (previously linked charities)
The University is required to consider whether there are any connected charities (as defined by
Charities Act 2011, Schedule 3, paragraph 28) and, if so, to disclose them to HEFCE, as principal
regulator, and to include appropriate disclosures in its annual accounts. Students’ unions are explicitly
excluded from needing to be considered. There is only one potential connected charity which should
be considered which is The University of Newcastle upon Tyne Development Trust, registered charity:
528066.
Charity Commission operational guidance indicates two tests which need to be applied:
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Is the charity established for the general purposes of, or for any special purpose of or in
connection with, the University?
Is the charity administered by or on behalf of the University?
and the charity should only be considered a connected charity if both tests are passed.
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In the case of the University of Newcastle upon Tyne Development Trust, the first test is probably
passed. The Trust’s aim is “To receive and invest donations to support the work of the University” and
the beneficiaries are listed as “Newcastle University and its students, through funding for staff and
student scholarships; the general public, through funding for certain public lectures and concerts”.
However we believe the second test is failed. The Trust manages its own affairs, produces and files
its own audited accounts, is separately registered with the Charities Commission and the University
only nominates a minority of its trustees. Although the University provides some administrative
support, this is on an arm’s length (and fully charged) basis. Investment management is a Trustee
responsibility and the University is required to account to the Trust that it has used the funds given for
the purpose for which it was intended.
The required disclosure that the University does not have any connected charities is included
in Note 31 of the financial statements.
Web information
HEFCE requires the University to publish information about its charitable status similar to that
published by the Commission in respect of the charities that it regulates.
The required information is at http://www.ncl.ac.uk/executive/governance/charity.htm
Non primary purpose activity
The University statutes which included define the object of the University as “for the public benefit, to
advance education, learning and research”. This is the University’s primary purpose. We are not
prohibited from doing activity outside of our primary purpose but this must be a small proportion of the
activity relative to that undertaken within primary purpose.
The main mechanism for judging that research is within primary purpose is that publication is not
hindered significantly. Under present guidelines from HMRC and the Charity Commission research
could potentially be classified as being non-primary purpose where publication is delayed beyond 12
months from the point at which publication could be made.
Research and Enterprise Services considers whether the funding is consistent with our charitable
purpose for all externally funded research activity. This is then notified to the Contract Financial
Management Team in Finance as part of the set up procedure and recorded in SAP to aid future
reporting.
Since August 1st 2012 there have been a total of 715 externally funded projects running in the
University of which 11 projects have been recorded as having significant publication restrictions which
may have the potential to render the project non-primary purpose. It is not intended to disseminate
any results from 4 projects, 5 projects require explicit permission from the funder for publication and 2
projects have a publication restriction of greater than 12 months. Under present guidelines agreed
with the Charity Commission and HMRC these would render the activity 'a private good' and therefore
likely to be outside of primary purpose. Of those 11 projects, 10 are funded by industrial companies,
who have requested the restriction.
On the basis of this analysis the vast majority of externally funded research falls within our charitable
aims.
John Hogan
Registrar
September 2013
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