The trustees present their annual report and financial statements for the year ended 31 March 2025.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charity's governing document, the Companies Act 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)".
LCI-UK is an independent, not-for-profit organisation dedicated to improving the performance of the UK construction industry through Lean thinking. We believe Lean principles can enhance efficiency, profitability, and sustainability across the sector. Our mission is to unlock improvement potential in construction and infrastructure by sharing the philosophy, strategies, and tools of Lean Construction.
We promote collaboration across individuals, teams, organisations and supply chains to support operational excellence and a culture of continuous improvement. Our vision is to help transform productivity and efficiency in construction and infrastructure, ensuring the UK industry delivers high-quality outcomes in a safe and sustainable way. These principles remain central to our work and guide our efforts in education, implementation, and research across the sector.
The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.
In the previous financial year, LCI-UK submitted its final report to the Construction Industry Training Board (CITB), marking the successful completion of the Lean Construction Development Programme (LCDP) pilot. This initiative demonstrated measurable improvements in productivity and performance across six major National Highways projects, supported by seven industry partners. The year also saw enhancements to our learning materials and systems, strengthened collaboration with steering groups, and increased engagement through outreach activities, including our panel at Highways UK.
The year 2024–25 has seen a period of reflection and consolidation, with a renewed focus on advancing our charitable objectives and enhancing public engagement. While progress continues across key initiatives, several areas have been identified for attention and strategic adjustment. These areas are further detailed in note 5 to the accounts.
The trustees were pleased to accept a donation of £312,000 from the LCI UK Projects Limited, ensuring that the funds are carefully managed in accordance with the charity’s adopted Reserves Policy. These resources will support the continuation of the charity’s Lean Construction initiatives, as well as the dissemination of results from completed projects, reinforcing the ongoing impact of our charitable work.
LCI-UK Summit
We are delighted that BAM UK have agreed to be our headline sponsor, contributing £10,000 in sponsorship revenue. Trustees approved a further £25,000 in project grants to ensure the smooth delivery of key initiatives and to support the successful execution and impact of the Summit.
Lean Construction Development Programme (LCDP)
The trustees have agreed to put certain initiatives on hold. To date, only part of the allocated £44,000 LCDP Learning Management System grant funding has been spent on Front-end Administration and Retaining Completions. The planned integration with the CRM system and Power BI, budgeted at £16,930 has been deferred.
Membership
Corporate membership levels have experienced a moderate reduction in recent years. Reinvigorating and expanding our membership base will be a key focus in the coming financial year. As part of this effort, we are exploring the creation of a Lean Forum to provide members with a more dynamic and engaging platform for learning and collaboration.
Financial Sustainability of the LCI-UK Projects Company
During the financial year, trustees noted with concern that the LCI-UK Projects Limited, a transactional arm of LCI-UK, had moved from a previously sound financial position to a period of diminishing revenue streams. This has prompted a review of its financial model and strategic direction. Strengthening the financial position is now a priority, alongside developing new revenue streams (such as short training courses), refining service offerings, and ensuring activities align closely with the charity’s long-term goals.
Considering the challenges posed by adverse economic conditions in 2024-25, the trustees have adopted a Reserves Policy to safeguard the charity’s assets and ensure their continued use for public benefit.
The Reserves Policy sets out the principles and framework established by LCI-UK Limited in determining the appropriate level of financial reserves to be held. It aims to:
Ensure the charity’s long-term financial stability.
Provide a safeguard against unforeseen financial difficulties.
Demonstrate good governance and transparency to stakeholders, funders, and regulators.
Finance new projects.
The trustees believe that the Reserves Policy strikes an appropriate balance between allocating grant funding to LCI UK Projects Limited to advance the charity’s purposes and preserving the charity’s long-term operational sustainability.
Target Level of Reserves
The trustees have considered the risks, financial commitments, and future plans of the charity.
Based on this assessment, the charity aims to maintain reserves broadly equivalent to 3 three months’ operating costs - currently estimated at circa £90,000.
This level is considered appropriate to:
Meet working capital requirements.
Cover unforeseen shortfalls in income.
Allow time to adjust expenditure in the event of changes to funding.
The trustees have assessed the major risks to which the charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks.
The Board remains confident in LCI-UK’s purpose and direction. While financial pressures and shifting industry dynamics have required careful consideration, our commitment to promoting Lean thinking and continuous improvement across the UK construction sector remains unwavering. We are grateful for the support of our partners, members, and steering groups, and look forward to strengthening these relationships as we move into the next phase of our journey. With renewed focus on sustainability, collaboration, and strategic growth, LCI-UK is well-positioned to continue making a meaningful impact in the years ahead.
The institute is a registered charity and a company limited by guarantee. The institute was incorporated on 14 March 2005, and registered as a charity on 31 December 2010. The company was established under a Memorandum of Association, which established the objects and powers of the charitable company and is governed under its Articles of Association.
In the event of the company being wound up members are required to contribute an amount not exceeding £1.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
In accordance with the charity's Articles of Association, the trustees may appoint a person who is willing to act to be a trustee. A trustee appointed by a resolution of the other trustees must retire at the next annual general meeting and must not be taken into account in determining the trustees who are to retire by rotation.
The trustees' report was approved by the Board of Trustees.
We report to the trustees on our examination of the financial statements of LCI-UK Limited (the charity) for the year ended 31 March 2025.
Having satisfied ourselves that the financial statements of the charity are not required to be audited under Part 16 of the Companies Act 2006 and are eligible for independent examination, we report in respect of our examination of the charity’s financial statements carried out under section 145 of the Charities Act 2011. In carrying out our examination we have followed the Directions given by the Charity Commission under section 145(5)(b) of the Charities Act 2011.
Since the charity’s gross income exceeded £250,000, the independent examiner must be a member of a body listed in section 145 of the Charities Act 2011. We confirm that we are qualified to undertake the examination because we are a member of The Association of Chartered Certified Accountants, which is one of the listed bodies.
We have completed our examination. We confirm that no matters have come to our attention in connection with the examination giving us cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the Companies Act 2006.
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the Companies Act 2006 other than any requirement that the financial statements give a true and fair view, which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
We have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
LCI-UK Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is 3 East Point, High Street, Seal, Sevenoaks, Kent, TN15 0EG.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.
The charity has taken advantage of the provisions in the SORP for charities not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Income from membership subscriptions is recognised across the subscription period.
Income from the supply of services is recognised with the delivery of the contracted service provided that: the stage of the completion, the costs incurred in delivering the service and the costs to complete the requirements of the contract can all be measured reliably.
Income is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of VAT.
The accruals basis is applied to all expenditure.
Expenditure has been allocated according to the Statement of Recommended Practice "Accounting and Reporting by Charities" and is shown under the appropriate sub-heading. Items of expenditure which involve more than one charitable activity , are allocated appropriately between the charitable activities involved on the basis of estimates made by the charity's management.
Expenditure is recognised when there is a present legal or constructive obligation resulting from a past event; it is more likely than not that a transfer of benefits (usually a cash payment) will be required in settlement; the amount of the obligation can be measured or estimated reliably.
Fixed asset investments are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in net income/(expenditure) for the year.
A subsidiary is an entity controlled by the charity. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any loss arising from impairment is recognised in the statement of financial activities in other administrative expenses.
Grant funding has been made to the charity's trading subsidiary LCI-UK Projects Limited. Listed below are the grant funding activities undertaken in the year;
1. LCI-UK Summit
LCI-UK are pleased to be hosting our first Lean Construction Summit since 2019, scheduled for June 2025. With a strong line-up of speakers and a programme targeted at both the strategic and operational level. We hope that the event at Austin Court in Birmingham will be a meaningful opportunity for the Lean community to come together, share insights, and strengthen relationships. Through careful budgeting, we are anticipating a cost-neutral event - dependent on securing adequate sponsorship and attracting over 100 delegates. We are really pleased that BAM UK have agreed to be our headline sponsor for the event.
2. Lean Construction Development Programme (LCDP)
The anticipated multiplier effect from the pilot has not materialised and the importance of having a ‘Client’ partner to help create the necessary push/pull dynamic for widespread adoption has become clear.
Two original partners chose not to renew their subscriptions this year, prompting a review of our business model to better understand their reasons and develop a more flexible offer. This shift partly reflects a pause in Government-led Highways work, and a perception of Lean as a ‘cost’, despite clear evidence of its strong return on investment. Whilst this is disappointing, we are pleased that both companies will continue to develop and deploy Lean within their respective organisations and remain ‘friends’ of LCI-UK.
We are in discussions with new partners and continue to see successful deployment of the programme among existing ones who have branched out into new sectors. The Executive Steering Group, formed to guide the pilot, has now concluded its role, while the Operational Steering Group remains active as a collaborative network of Lean practitioners.
3. Short Courses and Standards Development
We have begun developing and refining a new model for delivering short courses, designed to offer accessible, practical Lean learning. These courses will be launched after our upcoming summit.
We have also worked with the Construction Industry Training Board (CITB) to create additional Lean Construction standards for our ‘Lean Practitioner Modules’. These new standards will strengthen the foundation for consistent Lean deployment and support the LCDP in becoming a cost-neutral investment.
We have also collaborated with CITB Northern Ireland to ensure our standards are listed on their training register, enabling companies to access grant payments.
The average monthly number of employees during the year was:
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
During the year the charity entered into the following transactions with related parties:
Income from donations this year is derived from the charity's trading subsidiary.
Grant expenditure was made to the charity's trading subsidiary during the year.
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
These financial statements are separate charity financial statements for LCI-UK Limited.
Details of the charity's subsidiaries at 31 March 2025 are as follows: