Charity Annual Report and Accounts 2021-22

Reserves Policy

schemes run for more than three years, they will be reviewed annually to allow a rolling three-year commitment to be approved.

The reserves policy has the objective of reserving sufficient funds to cover the known commitments of the charity. The commitments comprise of all schemes approved by the Charitable Funds Committee. The charity does not commit to recurrent schemes. Some schemes may request funding for more than three years; however, the charity can only approve a commitment for three years expenditure, recognising that it will be asked to approve a further sum in the future, noting that this is without obligation. Where

A minimum of 60% of the total cash and financial investments (or value required to cover commitments) should be held in either a permitted bank or equivalent risk instruments (treasury bills invested either directly by the Trust or via an external cash management advisor). This percentage may only be amended with the approval of the CFC.

Applications for charitable funds over £25,000 are approved by the CFC and the impact on charitable fund balances are evaluated as part of the approval process. The Cancer Appeal Fund is the general fund for the Charity, General Research and individual funds are designated funds. In accordance with the guidance of the Charity Commission, the Charity uses designated funds to acknowledge general provisions for expenditure and future potential liabilities. Designation is an administrative act by which the Trustee may earmark unrestricted funds for a particular project or use, without restricting or committing the funds legally. The designation may be cancelled by the Trustee if it decides later that the Charity should not proceed with the use for which the funds were designated. NHS Charitable Funds traditionally consists (in common with many Trusts) of a large number of often small, designated funds. These funds are administered by designated fund-holders. The charity restricted funds are the Endowment Funds, the Radiology Interventional Fund and a small number of legacies. Restricted funds are specifically excluded from this policy in accordance with Guidance from the Charity Commission in document CC19 – Charity’s Reserves. This is because restricted funds are funds subject to specific trusts and are not freely expendable at the discretion of the Trustee.

A progress report is provided as required. Until the annual review date, provision will be made to ensure sufficient funds are available to support a positive decision should further support be affirmed. The reserves policy requires that commitments are backed by liquid resources. The policy therefore protects the spending plans of the charity against both falls in fundraising income and investment values. The commitments are reflected as creditors within the financial statements (noted in more detail as grant awards in the notes to the financial statements) and stand at £24.9 million at 31st March 2022. This leaves uncommitted reserves of £25 million as at 31st March 2022. However, a proportion of the uncommitted funds are made up of earmarked funds which, although not formally committed in an accounting sense, have been designated for particular purposes within the Trust. The charity reviews its levels of committed and uncommitted reserves on a quarterly basis. Of the charity’s unrestricted reserves of £20.6m there are £0.85m held as investment property leaving free reserves of £19.75m. As part of becoming an independent charity from April 2023, the Trustees will be reviewing the reserves policy as part of the overall strategy.

17