Annual Report and Financial Statements Year ended 31 March 2008
September 2008
Contents
Annual report
page
Chairman’s Statement
1-2
Chief Executive’s Review
3-4
Operating Review Governance Environmental Policy Statement
5 - 13 14 - 18 19
Directors Report
20 - 23
Remuneration Report
24 - 29
Statement on Internal Control
30 - 31
Certificate and Report of the Comptroller and Auditor General
32 - 33
Financial statements
Group income & expenditure account
34
Group statement of recognised gains and losses
35
Group balance sheet
36
Agency balance sheet
37
Group cash flow statement
38
Notes to the financial statements
39 - 72
1
Chairman’s Statement
2007/08 was a significant and successful year for both the NWDA and the region as we made important progress in driving forward our strong ambition for England’s Northwest and continued the transformation of our economy. This publication is an opportunity to reflect on some of the Agency’s key achievements during the past year, as well as outline our strategic objectives and key priorities. As set out in the Regional Economic Strategy (RES), it is clear that the focus on investing in significant transformational projects is already paying dividends and having a positive impact on our economy. Science remains a key driver for the Northwest , and the region’s strengths continues to develop. Following NWDA investment at Daresbury Science & Innovation Campus, the site has been named as one of two national centres of excellence for scientific expertise. With 65 companies now in situ, demand has necessitated the next stage of development, led by the private sector. Improving the provision of Higher Level skills for young people across the region is essential. Progress has continued in a number of areas, notably the University of Cumbria which opened its doors to students in September 2007. This achievement follows a number of years hard work by partners to build a stronger Higher Education framework for Cumbria and will help to retain talented young people in the region. Elsewhere in the region the Agency is providing the strategic leadership to help areas with acute economic needs. Working with ReBlackpool and Government Office for the Northwest, the NWDA is helping partners lead the development of sustainable solutions to Blackpool’s future. An action plan for the development of the town has now been agreed and I am pleased to report that this has received Government endorsement.
Sustainable economic growth requires places that people want to visit, live, work and invest in, and the regeneration of previously developed land is an important element in this. This year has seen further progress on transforming sites across the Northwest, following a £36 million investment for the second phase of the Newlands programme. Liverpool’s Capital of Culture celebrations are now well underway, and events already held have set the standard for what I am convinced will be a highly successful year for the city and the region. With the programme set to generate an additional £100 million for the Northwest in visitor spend, it is vital that we secure strong long-term benefits. There are many other areas in which 2008/09 will be an important year for the Agency and the region, and it is vital that we continue to deliver on our priorities. One significant activity will be the delivery of the new £521 million European Regional Development Fund programme in the Northwest. This is an important new role for the Agency which firmly brings together our regional priorities and investment from the EU. It provides a good opportunity to make sure European Union investment supports our agreed priorities. Another major priority will be to continue to simplify business support. The establishment of Business Link Northwest in 2007 was a major milestone, and it is important that we continue to make it easier for businesses to access relevant, timely business support. The Government’s Sub-National Review of Economic Development and Regeneration also presents us with new opportunities. The region has agreed to develop an integrated regional strategy for economic development, planning, housing and transport. This will involve an enhanced role for the NWDA and even stronger partnership working.
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The region has made excellent progress over the past 5 years. Our major cities have experienced renewed growth, we have created over 180,000 new jobs and levered in ÂŁ2.4 billion of investment. We have been able to achieve this because as a region we have agreed our priorities and used resources in a focused way to deliver them. The RDA has played an important leadership role but success depends on the involvement of many partners who have shared our ambition and vision for the Northwest. I would like to thank you for your continued support in helping to make this vision a reality.
Bryan M Gray Chairman
3
Chief Executive’s Review
In 2007/08 the Agency focused on working with our regional partners to deliver the priorities and transformational actions identified in the 2006 Regional Economic Strategy (RES). I am pleased to report that the delivery of the RES has continued the strong partnership established in its development. All partners have worked together to focus on delivering the priorities that will produce sustainable, long-term growth for our £111 billion regional economy. The Agency has continued to strengthen its relationship with all of our sub-regional and local partners throughout the year to ensure priorities are supported at a subregional and local level. We have worked on the development of governance and delivery within the City Regions of Manchester, Liverpool and Central Lancashire, given their capacity to increase the region’s economic performance. Through its Business Plan, the Agency continues to build upon the recommendations of our 2006 Independent Performance Assessment, in which we received a ‘Performing Strongly’ rating. Over the past year, a major focus of the Agency’s work has been to further enhance our evaluation of projects and programmes. Working in partnership with other RDAs and Central Government, the Agency has implemented a wide programme of evaluations that will not only identify effective practice to inform future policy and programmes, but will also contribute to a robust evidence base for the development of the new Single Regional Strategy as proposed in the Government’s Sub-National Review of Economic Development and Regeneration. It is vital that we have an efficient and effective organisation to ensure we deliver our RES commitments. Continuing to develop high quality people management practices and delivering on our equality and diversity obligations is an important element in this. Our achievement of Investors in People reaccreditation is a clear indication of our success in these areas. Many of the Agency’s achievements throughout the year are included within this annual report, but I would like to highlight the following:
• Progress on the region’s scientific assets including the next stage of development at Daresbury Science & Innovation Campus, designated as one of two national centres of excellence for scientific expertise, and further private sector investment for Liverpool School of Tropical Medicine. • The launch of Business Link Northwest, the new business support and brokerage service for the region, designed to increase the number of businesses and individuals accessing business support across the Northwest. • Progress on development of a Media Enterprise Zone at MediaCity:UK, which will reinforce Greater Manchester’s role as a hub for creative industries. • A £23.5 million investment to develop and implement the Northwest Climate Change Action Plan, which sets priorities for action to maximise the benefit from the economic opportunities presented through adapting to a lower carbon economy. • Major developments in the region’s skills infrastructure including the opening of the University of Cumbria and progress on the National Skills Academy for Nuclear in Cumbria, a world-class centre of excellence for nuclear skills development. • Agreement to an action plan by the Blackpool Taskforce, to guide the town’s successful regeneration. • Significant progress on the Barrow-in-Furness Waterfront Masterplan to regenerate the area and create new business and leisure opportunities. • A £36 million investment for the second phase of Newlands to turn 520 hectares of brownfield land into community woodland. • Support for major sporting and leisure events, generating £41 million for the regional economy. • The launch of Liverpool’s £19 million cruise liner facility, which will see a total of 23 vessels to the city over the next year, carrying 25,000 cruise passengers. • Maximising the long-term benefits from Liverpool’s year as European Capital of Culture 2008, which offers a unique opportunity to showcase the region to the rest of the UK and overseas.
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Whilst excellent progress is being made in the region, it is important that we look ahead and work with partners to maintain momentum. We will also continue to focus on evaluation of our projects and programmes and ensure that we meet the efficiency targets we have agreed with Government. I am determined to build upon the region’s strong position and ensure that the Agency leads the Northwest in setting priorities and continuing to focus resources where they have most impact.
Steven Broomhead Chief Executive
5
Operating Review
Key achievements against output indicators This section provides an overview of the Agency’s performance during 2007/08 against the indicators set by BERR to assess Regional Development Agency performance. The Agency also publishes (as a separate document) an Annual Performance Monitoring Report summarising its key achievements during the year.
This provides further a more detailed analysis of progress made against the objectives and priorities of the 2007/08 Business Plan. The Agency achieved at least the minimum point of the target range in all of its headline and mandatory indicators. These are detailed below:
Summary of performance Key achievements Target Range Number of jobs created or safeguarded.
13,350
18,050
Target Range Number of people assisted to get a job.
1,500
2,500
Target Range Number of new businesses created/attracted to the region.
1,760
2,640
Target Range Number of businesses assisted to improve their performance.
15,760
23,640
Target Range Number of businesses within the region assisted to engage in new collaborations with the UK knowledge base.
550
910
Achieved 16,087
Achieved 5,853
Achieved 1,963
Achieved 17,615
Achieved 855
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Operating Review (continued)
Target Range
Achieved
Public and private regeneration infrastructure investment levered. Total ÂŁm % private leverage
320 37%
535 62%
Target Range Hectares of brownfield land reclaimed and/or redeveloped.
238
322
Target Range Number of people assisted in their skills development.
10,000
15,000
Target Range Number of adults in the workforce achieving at least National Vocational Skills Qualification Level 2 or equivalent.
335
560
Target Range Number of adults gaining basic skills.
490
810
397 64%
Achieved 240
Achieved 22,307
Achieved 841
Achieved 748
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Key Activities 2007/08 Growing key regional sectors Business Developing an enterprising culture Simplifying and improving business support remains a priority for the Northwest and good progress has been made over the last 12 months. The launch of Business Link Northwest in April 2007 has provided a single point of contact for businesses seeking support. Nearly 97,000 users contacted Business Link in its first year of operation, with 90.1% reporting satisfaction with the new service. A new £8.5 million scheme was also launched to help potential entrepreneurs in key target groups, including women, disabled people, black and ethnic minority communities and people living in disadvantaged areas, to set up their own business. Delivered by a regional consortium led by A4E on behalf of the NWDA, the new Business Start up Programme, accessed through Business Link Northwest, is already achieving tangible results. It facilitated over 1,000 start-ups and generated over 3,020 applications from people wanting to move into self employment. Promoting an enterprise culture is also important. NWDA has established the Northwest’s first Regional Enterprise Forum, involving leading business people across the Northwest to develop, challenge and monitor the success of enterprise activity across the region. The NWEF is a strategic sounding board and advisor to the NWDA, Business Link Northwest and other regional partners to aid the development of appropriate strategy and policy. In recognition of the importance of ensuring that new business start-ups have access to high quality office space in order to stimulate growth and productivity, the NWDA invested £5.9 million in the Salford Innovation Forum, a 5,000 sq m development at Salford Innovation Park for knowledge based business start-ups and SMEs. The project is expected to create 55 new businesses, which will benefit from the transfer of technology from the higher education facilities based at the Innovation Park.
Supporting the growth of the region’s internationally competitive sectors has been a strong focus of the Agency’s business activity over the last 12 months. The growth of the Northwest’s creative sector continued with the signing of contracts and the confirmation of the BBC’s relocation of five departments to Salford Quays. The milestone marked the start of the media:city uk project, which is set to generate major economic benefits for the Northwest, creating over 15,000 employment opportunities and delivering £1 billion to the regional economy once complete. The BBC has also increased the number of jobs it will relocate to the region to over 1,600. The region’s reputation as a leader in biopharmaceutical development has also been strengthened this year with the announcement that the Bill and Melinda Gates Foundation is to invest a further $30 million in the Liverpool School of Tropical Medicine to fund an international malaria research programme. Supported by an earlier £23 million investment by the Agency and the European Objective One Programme, this brings the total funding from the Gates Foundation to over $100 million. The UK’s National Centre for Zoonosis Research, dedicated to the study of animal borne human diseases, also opened at the University of Liverpool’s veterinary campus, further boosting the region’s expertise in biomedical science. The NWDA invested £1.7 million in the centre through the Northwest Science Fund. The NWDA’s support for the energy and environmental technologies sector is helping to reinforce the reputation of the Northwest as a major player in the industry. The Agency announced an investment of £1.5 million for the Capenhurst Energy Innovation Centre in Cheshire, a unique facility designed to enable start-up companies and individuals to turn innovative ideas into commercially successful products and services for the energy industry. Encouraging scientific excellence Exploiting the Northwest’s science and research and development base continues to be a key priority for the NWDA. Our work to boost the region’s position as a
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Operating Review (continued)
centre of excellence for scientific and medical research passed major milestones this year, with the first phase of Liverpool Science Park (LSP) officially opened and work beginning on the construction of a second innovation centre next to the city’s Metropolitan Cathedral. The new £8 million building, funded by Merseyside Objective One Programme and the NWDA, will offer specialist accommodation and services for young businesses.
bringing together 300 researchers and lecturers to find solutions to major environmental problems, will ensure the region makes progress in this area. The NWDA partfunded the project, which will also provide technical resources for environmental impact management to help businesses grow and develop.
Significant achievements at the region’s flagship Darebsury Science and Innovation Campus included the Government naming the site as one of two national scientific centres of expertise. Another major success was the NWDA and Daresbury SIC’s development agreement with developer St Modwen to continue the development of the internationally recognised location for hi-tech businesses and leading edge science. The development, across 9 acres, will deliver more than £25 million of investment with potential for up to 200,000 sq ft of new accommodation and up to 1,200 jobs.
The NWDA recognises that success in international markets is critical to long-term, sustainable economic success and is working to ensure that the region is well positioned to respond to the challenges and opportunities of globalisation.
Driving the climate change agenda With climate change an increasingly crucial issue both regionally and nationally the NWDA is working with its partners to ensure that the Northwest becomes a leading region in adapting to climate change and maximising the economic benefits from a lower carbon economy. To support this, the NWDA announced a £23.5 million portfolio of investment this year to support the delivery of the Northwest Climate Change Action Plan, which sets out the priorities that will move the region towards a low carbon economy by 2020. Helping businesses deliver resource efficiency savings also remains an important issue. The Agency announced a £6 million investment for environmental support service ENWORKS to enable the provision of effective support for businesses to help them improve their competitiveness and productivity through environmental improvements. Research into sustainable energy is critical if the region, and UK is to achieve climate change targets. The opening of the Lancaster Environment Centre at Lancaster University, a £25 million research centre
Increasing competitiveness and investment
This year, the Agency, with partners, agreed a new internationalisation strategy. This was identified in the Regional Economic Strategy as a transformational action. The strategy prioritises three areas: developing key sectors; maximising the international potential of our science, research and development and higher education base and targeting strategically important countries for inward investment and trade. The NWDA also announced funding worth £4.9 million over the next three years to continue to back UKTI North West in offering businesses support to help them compete on the international stage. The Northwest continued to perform well in terms of inward investment. Key investments into the region included Vauxhall confirming the build of its new model Astra at its plant at Ellesmere Port, safeguarding 2,200 jobs. Encouraging businesses in the region to expand and innovate is also vital in improving competitiveness. Through its business finance initiatives, the NWDA continues to provide crucial support to businesses. The Selective Finance for Investment Scheme made a number of investments throughout the year, including a £1.95 million grant to Zen Internet to support the consolidation of its operations into a new headquarters in Rochdale. The investment will lead to the creation of 250 jobs over the next five years.
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Skills and Education Promoting workforce development As the national lead RDA for employment, skills and education, the NWDA has continued to influence national government policy. In the region we have led initiatives to drive workforce development, reduce worklessness and build a skilled workforce that matches the needs of businesses throughout the region. Tackling concentrations of worklessness and the recently unemployed requires targeted provision of support, skills advice and vocational training. The Agency has partfunded a new scheme to provide this support to recently unemployed residents in Carlisle seeking new jobs. The Carlisle Renaissance Job Brokerage Scheme has been set up to provide pre-employment support, enabling people to access training and qualifications linked to local job opportunities. Meeting the skills needs of the region’s sectors is another priority. In Cheshire and Warrington, the Agency is helping the automotive industry develop new higher skills through a £250,000 investment in the construction of a state-of-the-art Automotive Training Centre at Great Sankey High School. This will address the automotive skills shortages at 14-19 and adult level and will work with local employers to create new opportunities for students. In the civil nuclear sector, West Cumbria has been chosen as the location for the head office of the new National Skills Academy for Nuclear. The Academy will help to identify and improve standards and training throughout nuclear industries across the UK. To develop skills in the region’s other growth sectors, the Agency is also supporting other National Skills Academies in Food and Drink Processing and Financial and Professional Services. A major priority in improving the region’s productivity is strengthening the leadership, enterprise and management skills that are vital to company survival and innovation. The Northern Leadership Academy, launched during the year, aims to support and stimulate leadership across the North of England. Supported by a
collaboration of the three Northern RDAs as part of the Northern Way, the £5 million Lancaster University based academy provides strategies, resources and advice to companies and individuals. Agency support for the Trade Union’s Learning For All Fund has directly stimulated employer investment in workforce development through providing specific, tailored workforce based training, led by trade unions in partnership with employers. Developing educational infrastructure Improving the relationship between local business needs and FE and HE provision is a priority for the region. A major milestone in delivering the region’s agreed priorities for skills was the opening of the University of Cumbria in September 2007. This involved NWDA funding of £9.5 million for the creation of Britain’s newest university, which will help grow Cumbria’s economy and ensure that young talent remains in the area. Further education in Lancashire also took a significant step forward as work began on the development of a new college and university campus in Burnley. The NWDA is investing nearly £10 million in the project, to create the most up-to-date facilities for Burnley College, incorporating a sixth form centre and separate skills and adult centre as well as a centre for the University of Central Lancashire. By 2010 there will be places for over 1,000 students on degree and foundation degree courses on the campus, which, crucially, will be linked to the needs of employers through the Enterprise Park planned at the Agency’s Michelin site. In Cheshire the £38 million Macclesfield Learning Zone is nearing completion. The new campus will be officially launched during 2008 and incorporates a new college building, high school, sixth form college and joint sports centre, along with a new building for the college’s European Centre for Aerospace Training. Supported by a £5 million investment by the NWDA, the new educational campus will provide a responsive, high quality education service for the area which addresses local and regional skills needs.
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Operating Review (continued)
Warrington Collegiate’s Winwick Road campus was also officially launched by HRH The Duke of Kent. The new campus, which received vital Agency funding support, provides state-of-the-art learning facilities, including a £5 million business school, an award winning hair and beauty academy and a cabin crew training school, one of the first of its kind in the country. People & Jobs Regenerating the region To ensure that delivery of the Regional Economic Strategy (RES) is underpinned by clear priorities at local level, the Agency has continued to strengthen its relationship with sub-regional and local partners. Each sub-region has developed an economic development plan that meets its specific priorities as well as showing how RES priorities in its area will be delivered. The Agency continues to work with urban regeneration companies (URCs) in developing focused and integrated masterplans for the regeneration of priority areas. East Manchester’s economic and social renewal continues, with delivery led by New East Manchester URC. The £6 million restoration of Gorton Monastery is now complete, having been brought back into use as a conference venue and community resource. The Agency has also renewed its commitment to a number of initiatives aimed at getting people back into work, including the launch of the first East Manchester EnterPrize Competition to support residents starting their own businesses.
£2.6 million investment for the second phase of the Central Corridor project, led by ReBlackpool URC, which will build on an earlier investment to transform the main gateway into the town, improving access and enhancing the area for visitors. Through West Lakes Renaissance URC, the NWDA is implementing a number of programmes to regenerate communities and encourage new business opportunities in West Cumbria and Furness. This year has seen significant progress being made on The Barrow-inFurness Waterfront Masterplan, including Ramsden Business Park, which will cater for a wide spectrum of business activity ranging from managed workspace, knowledge-based and technology sectors and research and development. Meanwhile, implementation of the West Cumbria Masterplan in “Britain’s Energy Coast” is underway. This sets out how West Cumbria can build on its assets to develop a centre of excellence for energy and environmental technologies. The far reaching programme, which includes new business parks and major improvements to transport links, housing, health and leisure facilities, will help to create 16,000 jobs. Outside the main urban areas, other programmes are underway to aid the regeneration of our places. In Cheshire, Agency funding has facilitated the development of New Port Business Park at Ellesmere Port which, as part of its first phase, is expected to create 95 jobs and be a major source of job creation in the future.
Last year, supported by a £1.5 million grant from the NWDA, Central Salford URC undertook the acquisition of land on the edge of the River Irwell, to facilitate substantial private sector investment by putting in place the public realm infrastructure required to attract businesses and residents.
Supporting rural growth
In Blackpool a taskforce, which includes the Agency and partners, has agreed an action plan to attract investment and create new jobs, which has been endorsed by Government.
In 2007, the Agency took over responsibility for delivery of the Rural Development Programme for England in the Northwest. The programme will allow local stakeholder groups to design and implement a wide range of activities, ranging from business start-ups and vocational training to farming diversification.
Agency-funded projects underway in the town include a
The region’s rural economy is significant and the Agency continues to work hard to support its ongoing growth and maximise new opportunities for rural businesses and communities.
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Business support for rural businesses remains a priority. Following the movement restrictions imposed after 2007’s Foot and Mouth outbreak in the South, the Agency moved swiftly to provide a targetted support package for farming and allied businesses, focusing on marketing support and financial advice. The ‘Strengthening Rural Communities Across the Northwest’ programme aims to improve the provision of essential rural services by promoting the growth of social enterprise. March 2008 marked the completion of the Agency’s £17 million investment in the region’s Market Town Initiative. This programme aimed at raising rural living standards and attracting investment, created over 400 jobs and over 130 new businesses.
Infrastructure Transport Following the submission of the Regional Funding Allocations (RFA) to Government in 2006, which provided advice on the region’s housing, transport and economic development priorities, a number of significant transport announcements were made for the region during 2007/08. Plans for an £85.3 million refurbishment of the Blackpool and Fleetwood tram system were announced by the Department for Transport, with the government contributing £60.3 million. This investment follows advice to the Government from the Blackpool Task Force, which is chaired by the NWDA, recommending the areas for investment to enable the town’s regeneration.
Securing economic inclusion Recognising the economic benefits of reducing health inequalities and promoting social inclusion, the Agency has been using its strategic influence to pioneer a number of initiatives to get people in hard-to-reach groups back into work and improve productivity. Working with the North West Regional Assembly and Government Office for the Northwest, the Agency is leading the implementation of the region’s Equality and Diversity Strategy. Priorities include tackling discrimination in the labour market, promoting enterprise to non-traditional entrepreneurs and reducing skills disparities. Health programmes for the region’s workforce are also being developed, following the creation of a new Northwest Healthy Workplace Strategy. Led by the Agency and the NHS, the Strategy aims to reduce sickness rates and improve productivity.
RFA road schemes which opened during the year included the A66 (Temple Sowerby) bypass and the A590 High and Low Newton bypass in Cumbria. In Lancashire, the development of the Heysham M6 was granted planning permission. Transport links within the city regions of Greater Manchester and Liverpool are critical to maximising their potential for economic growth. During the year, the NWDA announced an investment of £8 million to support the enhancement of the existing Manchester Metrolink service into Salford Quays, helping to facilitate major service improvements. With over 15,000 jobs to be created at Salford Quays once the MediaCity:UK development is complete, these improvements will deliver the required accessibility between the area and the city centre. Manchester Airport railway station will get improved capacity following Greater Manchester Passenger Transport Authority’s (GMPTE) approval of funding for a third platform. The new platform and associated works have been funded by GMPTE, Network Rail and the Northern Way.
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Operating Review (continued)
Through the Northern Way, the Agency is also helping to fund improved rail access to the Port of Liverpool, including an enhanced loading gauge so that Maritime containers can use the rail network to travel to and from the Port.
In Lancashire, Agency investment of £3.75 million has begun a three-year programme to regenerate the Freckleton Street area of Blackburn, an integral part of the wider masterplan for the town. This will lever in £40 million of private sector investment.
Investing in new landscapes
Leading sustainable growth
Transforming brownfield land to natural assets is an important element of our work to attract private sector investment, create jobs and enhance quality of life for local people.
As part of its commitment to sustainable development, the Agency has continued to focus on improving the efficiency of development projects, as the region works towards reducing its carbon emissions.
The Newlands scheme has continued to make a real difference in transforming brownfield sites in Greater Manchester and Merseyside into community woodland. This has included the Belfield scheme in Rochdale to revive 28 hectares of brownfield land on the edge of the town centre.
Greater Manchester’s Bickershaw Colliery site was named as one of two sites in the North of England to pioneer zero carbon homes as part of the Government’s response to climate change. Run by English Partnerships and delivered by the Agency, the project will see around 650 new homes which meet the most exacting standards for environmentally friendly development.
Creating high quality business locations Quality of Life Development of the region’s strategic employment sites has continued to make good progress over the last 12 months, helping to underpin the region’s future success as a business and employment location and attracting investment from the private sector. In Greater Manchester, Rochdale’s Kingsway Business Park saw its first occupier, manufacturing company Vindon Scientific, exchange contracts to relocate to the site. The spine road running through the site was also completed. The continued growth and development of the Liverpool University Edge supports the growth of the knowledge economy in Merseyside. An urban design framework and public realm implementation plan has been put in place this year for the development of Liverpool’s knowledge quarter, including the Liverpool University Edge site. Other key employment sites in Merseyside included an investment construction of a new business park for Widnes Waterfront. This will attract growth sector businesses and create over 150 job opportunities for the local community and forms part of a wider programme to regenerate the waterfront area.
Developing cultural appeal To maximise the economic impact of Liverpool’s role as European Capital of Culture 2008, the Agency is working closely with the Liverpool Culture Company to market the city, and the Northwest, to the UK and overseas. Estimates show that this year alone will generate an additional £100 million for the Northwest economy in visitor spend, each sub-regional Tourist Board is running complementary programmes to maximise the benefits for the whole region. Themes include adventure (Cumbria), food and drink (Lancashire) and world sport (Manchester), Year of the Garden (Cheshire). Liverpool’s reputation as an international arts capital was bolstered following the city’s hosting of the 2007 Turner Prize, the first time the Prize was presented outside of London. An economic impact study showed that over 70,000 people visited the exhibition – a greater number than in London in the previous year – generating in excess of £10 million for the city.
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Tourism leadership The Northwest’s tourism industry is valued at over £11 billion, and its ongoing development is essential to ensure the region is equipped to take advantage of future opportunities to further grow the visitor economy. Our Tourist Boards are also leading the promotion of sustainability, championing the Green Tourism Business Scheme and encouraging visitor businesses to reduce energy use and waste. Sustainable tourism encourages action through a wide range of initiatives. To support the provision of the skills required by the sector, the Agency is involved in the development of the National Skills Strategy for the sector, as well as plans for a National Hospitality Skills Academy in the Northwest. Marketing the region Visitor marketing campaigns have been launched to highlight the region’s cultural offer, including a short film reasserting the region’s position as a hotbed of cultural talent. Showcased in art-house cinemas in London and the South, the film went on to win a prestigious national ‘Campaign’ magazine award. A particular priority is to secure a greater regional share of the conference market. Working with key national newspapers, the Agency produced four supplements throughout the year to promote the region as a business tourism destination, reaching a combined readership of 700,000 business decision makers. The region has continued to reinforce its reputation for successfully hosting major sporting and cultural events bringing economic impact and projecting a positive image. Major events secured this year include the MTV Europe Music Awards and BBC Sports Personality of the Year (Liverpool), NESTEA European Championships Beach Volleyball (Blackpool) and the European Badminton Championships (Liverpool and Manchester). Major events supported by the Agency this year generated £41 million.
Following the success of the Paralympic World Cup in 2007, Manchester once again played host to the competition in 2008. Supported by the Agency, the event attracted record numbers of competitors and showcased the Northwest’s world-class sporting facilities. Elsewhere in the region, the Agency supports the Kendal Mountain Film Festival, featuring world-class adventure films and inspirational speakers, the event showcases the best of Cumbria to an international audience. The Northwest is also continuing to work hard to ensure it benefits from the estimated £6 billion of work available from the 2012 Olympic and Paralympic Games. This year saw the national launch of the London 2012 Business Network in Manchester. The service aims to help regional businesses compete for Games-related contracts. We also developed “Be Inspired,” the Northwest Legacy Framework for the 2012 Games. Improving the visitor experience The Agency has also prioritised investment to further develop the regions visitor offer. Liverpool’s position as a major world destination was reinforced with the launch of its £19 million cruise liner terminal. The project, which received £10 million from the Agency, will see a total of 23 vessels and 25,000 passengers pass through the city over the next year. This year also saw the opening of the city’s Arena and Convention Centre, part-funded by the NWDA, and set to inject £100 million into Merseyside’s economy in 2008 alone. Elsewhere on Merseyside, Aintree Racecourse is building on its success for attracting 200,000-plus visitors to the region each year through the establishment of an International Equestrian Centre. Funded by the Agency, the Centre will reinforce Aintree as a centre for the riding stars of the future. In Manchester, the People’s History Museum is beginning a refurbishment project to help to boost the Museum’s appeal as a world-class visitor destination. This follows a £9 million investment by the Heritage Lottery Fund and the Agency.
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Governance
The Board
Peter Allen MBE (appointed December 2007)
Board Members, including their occupations and interests are listed below. The full Register of Board Members Interests is available from the Agency’s website www.nwda.co.uk. Details of transactions with relevant organisations in the financial year are set out in note 31.
Cumbrian hill farmer based near Penrith. As Chair of the Sheepmeat and Goatmeat Advisory Committee to the EU, he has been involved in reforming and implementing the European sheep regime. Peter for many years was actively involved with the NFU, representing farming and rural issues locally, regionally and nationally. He is currently Chair of the NFU, Mutual Northern Area board, Chair of RUMA (UK body promoting the Responsible Use of Medicines in Agriculture), a board member of Natural England and the North West Regional Environment Protection Advisory Committee.
Bryan Gray MBE DL (appointed April 2002) Bryan Gray is Chairman of the Northwest Regional Development Agency (NWDA). He is also: • Vice President of Micropower, promoting new energy • Pro Chancellor of the University of Lancaster • A member of the National Learning & Skills Council • Chairman of Liverpool Culture Company Board • Trustee of National Museums Liverpool • A member of Liverpool Cathedral Council • Board Member of Culture Northwest • Non-executive Chairman of Westmorland Ltd • A member of Lake District National Park Authority • Non-executive Chairman of Urban Splash Hotel company
Professor Sir Martin Harris CBE DL (appointed December 2001) Deputy Chairman of the NWDA. Chancellor of the University of Salford. Chair of USS Limited and Manchester Knowledge Capital. Director of the Office for Fair Access, which promotes fair access to higher education.
Vanda Murray OBE (appointed April 2006) Deputy Chair elect of the NWDA from 1 January 2007. Over 20 years’ experience at a senior management level across a range of industries in the UK, Europe, Asia and the USA. Currently holds non-executive roles with Carillion plc and the Cheshire Building Society. She is also Non-executive Chair of Eazyfone, a mobile phone recycling company. She was awarded an OBE for services to Industry and to Export in 2002.
John Brooks (appointed December 2007) Vice Chancellor of Manchester Metropolitan University. In his previous job at the University of Wolverhampton he chaired a regeneration project after the closure of Rover, which involved infrastructure development and small business support. He chairs the Board of the Equality Challenge Unit, and is on the Boards of Universities UK (and their Long-Term Strategy Group,) the Oxford Road Corridor Partnership and the Universities & Colleges Employers Association.
Joe Dwek CBE (appointed December 2003) Executive Chairman and Chief Executive of Bodycote International Plc from 1972 until his retirement in 1998. Formerly Chairman of the Mersey Basin Campaign, Envirolink, Enworks, and the Healthy Waterways Trust. He was also a former member of the Board of the BERR’s Environmental Innovation Advisory Group. He is Director of Jerome Group Plc, Penmarric Plc, Opal Property Group Ltd and Mercury Recycling Ltd. He is also Chairman and Chief Executive of Worthington Group Plc.
Peter Hensman DL (appointed December 2004) A chartered accountant and engineer who has spent most of his career in the general and financial management of manufacturing companies. Executive Director of a small group of companies involved in tourism, leisure and property in Cumbria. Also Vice Chairman of Cumbria Rural Enterprise Agency and the Furness Building Society. Chairs Cumbria Community Foundation and Kendal Futures Board.
15
Robert Hough DL (appointed December 2007)
Councillor John Merry (appointed December 2004)
Deputy Chairman and Executive Director of Peel Holdings for over 20 years and 13 years respectively and a Non-executive Director of a number of other companies, including Cheshire Building Society and Provident Financial plc. Peel’s businesses include airports, ports, land use, planning, development, waste, energy and the environment.
Leader (Labour) of Salford City Council. He is a Board Member of the National Learning & Skills Council and the Greater Manchester Learning & Skills Council. He has previous membership of various organisations and committees with an education and training remit. He has been a full-time Councillor since 1990 with previous career experience in retail and sales. In addition to being a Councillor, he has held office at the local branch of the Labour party and canvassed on its behalf
A Board Member of the University of Manchester, he also chairs New East Manchester Limited (one of the first Urban Regeneration Companies to be established) and is a Member and former Chair of the North West Business Leadership Team.
Dave McCall (appointed December 2003) Regional Secretary of the Transport and General Workers' Union since 1996 and Chair of the Northwest Trades Union Congress (TUC) from 2002 to 2008. He has been a full-time trade union official since 1980 and served on the Northwest Industrial Development Board. He served on the governing body of Manchester Metropolitan University. Currently chairperson of Migrant Workers North West.
Cllr Marie Rimmer CBE (appointed December 2002) Elected member (Labour) of St Helens Metropolitan Borough Council. She is a Governor of Cowley Language College and a member of the Management Board of Red Bank Community Home. She was the Chair of the former Association of Metropolitan Authorities Housing Committee and served on the European Committee of the Northwest's Social Affairs Committee. She was also the Chair of the Northwest Coalfields Communities Campaign. She has been politically active on behalf of the Labour party since 1969, and has held office at branch, constituency and district party level.
Councillor Tony McDermott MBE (appointed December 2007)
Brenda Smith (appointed December 2001)
Leader of Halton Council. Educated at St Edward’s College, Liverpool and Manchester University. Taught in Lancashire and Liverpool for 34 years. Board Member of the Local Government Association Improvement & Development Agency, the Mersey Partnership, and the North West Improvement Network. Chair of the North West Regional Transport Group and former Chair of the North West Regional Assembly.
Group Managing Director of Granada Television and Managing Director of Granada Studios Plc until May 2004. She was also Deputy Chair of Granada Television Ltd until July 2006 and Group Managing Director of Ascent Media Group from 2004 until 2007.
A member of the Urban Commission Executive and the Northern Way Transport Compact. A supporter of Asbestos Victims Support Group and Board Member of the 5 Boroughs NHS Mental Health Trust.
She is a Board member of Liverpool Vision and has chaired the NW Regional Marketing Forum since December 2002 and is a Member of the Tourism Forum. She is also a Non-executive Director of Manchester Airport Aviation Services and a Board Member of Knowledge Capital and Women in Film and Television. She is also a Member of the Board of Governors for Manchester University until 2009.
16
Governance (continued)
Professor Maureen Williams
Dr Pauleen Lane CBE (appointed December 2001)
(appointed December 2002) Professor Maureen Williams is the Chief Executive and founder of the Merseyside Development Foundation. She is an Honorary Fellow and Visiting Professor of Sociology (Governance) at Liverpool John Moores University. She is a Non-executive director of Liverpool Primary Care Trust, the Mersey Partnership and a former council member of Greater Merseyside Learning and Skills Council. She is currently Vice Chair of the North West Region European Partnership where she leads on Energy and Climate Change.
Elected member (Labour) of Trafford Metropolitan Borough Council. A civil engineer who has worked in engineering practice, Dr Lane currently lectures in geotechnics and computing at the University of Manchester. She is also a Non-executive director and Deputy Chair of English Partnerships.
Professor John Moverley OBE (appointed December 2004)
Professor Williams remains a trustee of various local and national charities and a senior expert/consultant with the Council of Europe. She is co-founder of Community North West and a former Chair of the Big Lottery Fund’s North West Community and Voluntary Sector Funding Programme.
Councillor Susan Williams
Chief Executive of the Royal Agricultural Society for England. He was an invited member of the All Party Rural Economy Group, founded in the House of Lords. He is a member of the Regional Steering Group for the Department for Environment, Food and Rural Affairs (Defra) and a Theme Champion for Sustainable Food and Farming. He is also a former Principal of Myerscough College in Lancashire.
(appointed December 2007) A nutritionist for the charity Action and Research into Multiple Sclerosis until 2001. Became Conservative leader of Trafford Borough Council in 2004. Member of Manchester Enterprises Board, Association of Greater Manchester Authorities Economic Development Board and Trafford Local Strategic Partnership Board. She has acted as a political agent for the Conservative party. In 2001 she stood for Parliament in Wythenshawe and Sale East, and in 2006 she was selected as the Parliamentary candidate for Bolton West.
Anil Ruia OBE JP LLB (appointed December 2001) Director of Wrengate Limited. The company imports, distributes and converts textiles. Also a Director of Warren Tea Limited in India, which grows, manufactures and sells tea. A Magistrate, Mr Ruia also holds a number of positions which contribute to the economic regeneration of the Northwest including Chairman of the Northwest International Trade Forum, Deputy Chair of Manchester Knowledge Capital and a Non-executive Director of Granada Television.
Former Board Members The following Board Members retired from the NWDA Board in December 2007.
David Brockbank (appointed December 2004) Chairman of Cumbria Vision, the private-sector led organisation responsible for the economic development of Cumbria, and a member of Lancaster University Council and Cumbria Tourist Board.
Councillor Mike Storey CBE (appointed December 2001) Longest serving elected member (Liberal Democrats) of Liverpool City Council. He is the Head Teacher of Plantation Community Primary School in Halewood, Merseyside. Also Director of the Capital of Culture Company,
17
Liverpool Arena and Convention Centre and a Trustee of St Georges Hall. He was a founder member of the Mersey Partnership and is Liverpool City Council Executive Member for Regeneration.
Board Meetings and Committees The Agency’s Board met 11 times during the year. There are two formal committees to the Board as follows: • The Remuneration and Appointments Committee which, during the year to 31 March 2008, convened on 4 occasions, and • The Audit Committee which also convened on 4 occasions. There are seven Sub-Committees to the main Board, which met regularly throughout the year: Enterprise and Skills Marketing, Communications and Tourism Development and Infrastructure LSC Liaison Committee Equality and Diversity SRP Strategic Liaison Committee Environment
Executive Management Board Executive Management Board (EMB) is made up of Executive Directors and Directors from the NWDA and is Chaired by the Chief Executive. EMB meet approximately twice per month and its roles and responsibilities include determining policy with Board approval where appropriate; achieving and maintaining operational integration across the Agency and to achieve and maintain communication flows between management and staff.
Rural Advisory Forum The Rural Advisory Forum was established to advise the Agency on rural matters and particularly to ensure that the Agency’s activities, programmes and projects reflect, where appropriate, the new RES, and Rural Delivery Framework and the Region’s rural priorities as determined by the Regional Rural Priorities Board.
Annual General Meeting The Agency’s Annual General Meeting was held on 18 October 2007 at the Manchester International Conference Centre. The conference outlined the key activities of the Agency and its partners in the preceding year. The Chief Executive and Chairman presented their future plans for the Agency and the Region. The 2008 Annual General Meeting will be held on 26 September 2008.
Code of Best Practice Board Members are governed by a Code of Best Practice, which amongst other things outlines: • The Board’s requirement to demonstrate Public Service Values and their accountability for public funds. • Relationship with Central Government. • The role of the Chairman and Chief Executive. • Corporate and individual responsibilities of Board Members. • Handling conflicts of interest. The Agency has ensured adherence to the Code through the robust and thorough monitoring and recording systems that are in place. Board Members have declared interests at particular Board discussions as appropriate. Staff have followed a similar requirement in compliance with the Agency’s Code of Conduct. Further information concerning any of the above can be obtained from the Agency’s Warrington Headquarters.
Equality and Diversity The Agency continues to be committed to Equality and Diversity - it underpins all our policies, programmes and associated activities. To maintain our position as a thriving region, with increased growth and GVA, we need to ensure that we provide opportunities for economic inclusion and participation for all our population in the Northwest. All NWDA Board Members and staff are expected to promote this through their interaction with contractors, partners and service providers. This year we have raised the profile of equality and diversity within the Agency with the establishment of a dedicated Equality
18
Governance (continued)
and Diversity resource. We are continuing to fulfil our specific responsibilities and duties in relation to Race, Disability and Gender and we have developed a new and systematic approach through our Equality Impact Assessments to ensure all our policies, projects and programmes meet their obligations and our equality objectives in full. We have also begun to develop a Single Equality Scheme which will continue to address Race, Disability and Gender and also cover Age, Sexual Orientation and Religion and Belief. A copy of the Agency's policy on Equality and Diversity can be found on our website www.nwda.co.uk.
Freedom of Information Act and the publication of information The Freedom of Information Act became fully operational on 1 January 2005. The Act applies to some 100,000 public authorities, including England’s nine Regional Development Agencies. The Act provides greater access to all types of recorded information held by public authorities and imposes obligations on them to disclose information, subject to a range of exemptions. Section 19 of the Act requires public authorities to adopt and maintain a publication scheme which relates to the publication of information by the authority and in accordance with its publication scheme. Eight of the nine English RDAs agreed to a collective publication scheme which outlines the information that will be published by each of those RDAs. The Northwest Regional Development Agency took responsibility for the development of the RDAs model publication scheme and the Information Commissioner approved this in October 2002. The publication scheme is available at www.nwda.co.uk. The Agency received 37 requests for information under the Act between 1 April 2007 and 31 March 2008.
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Environmental Policy Statement
Our aim is to contribute towards the region’s sustainable economic development and ensure that environmental objectives are integrated into the business objectives of the NWDA, our partners and suppliers. We are committed to reducing our environmental footprint, with an emphasis on reducing our contribution to climate change factors, through ongoing measurement and continual improvement of our environmental performance. We will ensure our own activities and operations reflect best environmental practice. Specifically we will: • Comply with all relevant UK, European and International environmental legislative regulatory and other requirements; • Prevent avoidable pollution or nuisance that may be caused by our activities; • Demonstrate a high-level commitment to environmental best practice under the guidance of the Board Environment Sub-Committee; • Ensure that, through our policies, programmes, projects and key stakeholders, the Agency influences environmental sustainability across all economic priorities; • Quantify the NWDA’s environmental impact in relation to energy usage and waste production and establish annual reduction targets and publicise our performance annually; • Implement continuous improvement through an environmental action plan; • Ensure that all projects and programmes we fund incorporate environmental aspects in their development and are appraised for their environmental impacts through sustainable development appraisal;
• Develop and implement a sustainable procurement policy; • Promote environmental awareness amongst employees through specific induction training, topic specific training and in-house media; • Review and revise this policy statement on an annual basis.
Steven Broomhead, Chief Executive November 2007
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Directors Report
Statutory background The Northwest Regional Development Agency (‘the Agency’) was established under the provisions of the Regional Development Agencies Act 1998. It came into existence on 14 December 1998, following Parliamentary approval of the Regional Development Agencies Act 1998 and the appointment of Board Members. The Agency is an Executive Non-Departmental Public Body (NDPB) sponsored by The Department for Business, Enterprise & Regulatory Reform (BERR). The Agency became fully operational on 1 April 1999 when it took over the regional activities of English Partnerships and the Rural Development Commission and the SRB Challenge Fund formerly administered by Government Office for the North West. A number of other activities have subsequently been transferred into the Agency, notably the business of Inward Limited, the Northwest Tourist Board, the Selective Finance for Investment Programme, the development of skills and employment, policy and business support and delivery mechanisms, and the North West Business Link organisations.
Statement of the Agency’s and Chief Executive’s responsibilities Under section 14 of the Regional Development Agencies Act 1998 the Agency is required to prepare a statement of account for each financial year in the form and on the basis determined by the Secretary of State, with the consent of Treasury. The Financial Statements are prepared on an accruals basis and must give a true and fair view of the Agency’s state of affairs at the year end and of its income and expenditure, total recognised gains and losses and cash flows for the financial year. In preparing the Financial Statements the Agency is required to: • Observe the Accounts Direction issued by the Secretary of State, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis; • Make judgments and estimates on a reasonable basis; • State whether applicable accounting standards have been followed, and disclose and explain any material departures in the Financial Statements; • Prepare the accounts on the going concern basis, unless it is inappropriate to presume that the Agency will continue in operation.
The Accounting Officer for the Department for Business, Enterprise & Regulatory Reform has designated the Chief Executive as the Accounting Officer of the Northwest Regional Development Agency. His responsibilities as Accounting Officer include responsibility for the propriety and regularity and value for money of the public finances; the keeping of proper records and advising and informing the Board of financial considerations. These requirements are set out in the ‘‘Non-Departmental Public Bodies’ Accounting Officer’s Memorandum” issued by the Treasury and published in Managing Public Money. The Agency and the Chief Executive are also responsible for ensuring that there are appropriate controls over any publication of the Financial Statements, including the publication of the audit certificate on the Agency’s website and in other electronic forms. So far as the Accounting Officer is aware, there is no relevant audit information of which the entity’s auditors are unaware. The Accounting Officer has taken all the steps that he ought to have taken to make himself aware of any relevant audit information and to establish that the entity’s auditors are aware of that information.
Management Statement and Financial Memorandum The Secretary of State has issued the Agency with a Management Statement and Financial Memorandum setting out the financial framework under which the Agency should operate. The Agency has complied in all material respects with the terms of this memorandum during the course of financial year.
Results for the year and review of activities The net expenditure for the year after taxation was £386.7m (2007: £396.3). The Agency’s total expenditure for the year amounted to £462.2m (2007: £462.7m), of which £394.6m (2007: £406.7m) was spent on delivering programme activities. The full results for the year are contained in the Agency’s financial statements set out on the following pages. The Agency continues to manage its financial affairs in accordance with the targets laid down by our sponsor department and the main Board. All financial targets have been met and associated output targets achieved. The underlying systems and processes within the Agency have been scrutinised by National Audit Office
21
and partners and demonstrate that the business is operated from sound systems base. This level of control allows the Accounting Officer and the Board to manage the financial affairs of the Agency to a very high standard.
Significant changes in fixed assets In 2006/2007 the Agency transferred its Investment property portfolio and some of its Development property portfolio to a separate joint venture partnership. In 20072008 the Agency was focused on ensuring that this arrangement was managed effectively and therefore no significant changes in fixed assets occurred during this financial year.
Future developments The Agency has produced a Corporate Plan and Strategic Investment Plan for the period 2008-2011 which aligns all of the corporate planning and financial planning to enable investment decisions to maximize the impact in the region. In addition the Agency is responsible for the day to day management of the new European Regional Development Fund which will invest over £500 million into the region over the next five years. By bringing this into the Agency it allows the region to benefit from a streamlined appraisal process and to maximize the leverage of private funding alongside single programme funding and European investment. Investment decisions within the region are informed by the sub-regional action plans developed by the subregional partnerships and ensure that the priorities of the sub-regions are incorporated wherever possible within the Strategic investment plan and align with the Regional Economic Strategy. The work with the sub-regional partners has been strengthened during the year and as a consequence the Region is able to identify where the priority investments are and the contribution that NWDA and European funding can make towards achieving these.
Board members Board Members are appointed by the Secretary of State. They include Local Authority, Trade Union, Community and Private Sector representatives. Their corporate responsibilities are detailed in the Code of Best Practice for the Board of the Northwest Regional Development Agency, which is a public document available from the
Agency’s offices. Bryan Gray MBE DL, Chairman (appointed April 2002) Professor Sir Martin Harris CBE DL, Deputy Chairman (appointed December 2001) Vanda Murray OBE Deputy Chair elect (appointed April 2006) Joe Dwek CBE (appointed December 2003) Peter Hensman DL (appointed December 2004) Dave McCall (appointed December 2003) Cllr John Merry (appointed December 2004) Cllr Marie Rimmer CBE (appointed December 2002) Brenda Smith (appointed December 2001) Professor Maureen Williams (appointed December 2002) Robert Hough DL (appointed December 2007) Cllr Tony McDermott MBE (appointed December 2007) Cllr Susan Williams (appointed December 2007) Peter Allen MBE (appointed December 2007) John Brooks (appointed December 2007) Brief biographies for the Board Members are shown in the Governance section of this document. Board Members are contracted to carry out two days work per month on behalf of the Agency. The Chairman is contracted for three days per week and the Deputy Chairman and Deputy Chair elect one day per week. The Agency maintains a Register of Board Members’ Interests, which is available on request by contacting the Chief Operating Officer at the Agency’s offices at Renaissance House, Warrington. Members declare their interests to the Board in any transactions involving relevant organisations. Related party transactions relating to Board Members and senior members of staff are detailed further in note 31.
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Directors Report (continued)
Board representation on the Audit Committee and the Remuneration and Appointments Committee was as follows: Audit Committee Peter Hensman (Chair) Marie Rimmer Joe Dwek Dave McCall Maureen Williams Peter Allen
Remuneration and Appointments Committee The work of the Remuneration and Appointments Committee is detailed in the Remuneration Report contained in pages 24 to 29 of this report.
Employment of disabled persons
Remuneration and Appointments Committee Bryan Gray (Chair) Dave McCall (Vice Chair) Martin Harris Brenda Smith
The Agency is committed to providing equal opportunities for all and will make reasonable adjustments to working arrangements to meet special needs. We will work towards an environment and culture where everyone is encouraged and supported to develop their full potential regardless of individual characteristics, which may limit a person’s opportunities in life.
Audit Committee
Provision of information to and consultation with employees
The Board is independently advised by an Audit Committee whose role is to provide the Board with advice and information to undertake the governance and supervisory role required in accordance with Corporate Governance Best Practice. The Terms of Reference of the Audit Committee, including its role and the authority delegated to it by the Board, has been made available to the public on the Agency’s website.
The Agency is fully committed to effective and open communication and consultation with its employees. This is achieved through a variety of means including a Staff Consultative and Negotiation Committee involving the Public and Commercial Services (PCS) and Prospect Trade Unions together with staff representatives; a Health and Safety Committee; and staff events to communicate key issues and receive feedback.
The Audit Committee met five times during 2007/08 to receive assurance on the Agency’s systems of corporate governance, risk management and internal control. The Committee also received regular reports from Baker Tilly as independent Internal Auditors. The range of Audit Committee activity carried out during 2007/08 has provided positive assurance about the Agency’s governance and control environment and has supported the Accounting Officer in signing a satisfactory Statement on Internal Control for the year.
Better payment practice code
The Committee was active in managing the governance agenda by requiring updates of Agency policies to ensure they remained at the leading edge of best practice, including risk management arrangements, Financial Regulations and the Scheme of Delegations, whistle-blowing and anti-fraud arrangements.
During 2007/2008 the Agency achieved its target of 95% for prompt pay. This was achieved as a result of a fundamental review of our payment processes and procedures and resulted in a streamlined authorisation and payment process. As a result the prompt payment statistics for the financial year was 95.4%. This level of performance will be maintained throughout 2008/09.
Audit services The Comptroller and Auditor General is appointed by statute to audit the Northwest Regional Development Agency, and reports to Parliament on the truth and fairness of the annual Financial Statements and the regularity of income and expenditure. The following costs have been incurred in relation to services provided by the Comptroller and Auditor General:
23
Audit Services
£77,000
NWDA CO2e 2006/07
The Comptroller and Auditor General also has statutory powers to report on economy, efficiency and effectiveness with which the Agency has used its resources. In November 2003 the Comptroller and Auditor General published the ‘Success in the Regions’ report on how the Agencies and the departments work together. This and other reports issued by the Comptroller and Auditor General can be found on the National Audit Office Website at www.nao.org.uk. CO2e NWDA Footprint = 2958 tonnes
Statement of the Agency’s policy for conserving energy, reducing waste and minimising the release of greenhouse gases. During 2007/08 the NWDA undertook the development of an Environmental Management System (EMS) that met the requirements of ISO14001. Following external auditing the NWDA achieved ISO 14001 certification for Renaissance House and the Single Programme. The development of the EMS and its successful certification has formalised the internal environmental management of the NWDA’s systems and process, ensuring through regular internal auditing the NWDA strives to put in place best environmental practice and continuous improvement. As part of a commitment to minimise the Agency’s corporate CO2 emissions, the Agency has undertaken a base line assessment of its carbon footprint for 2006/07. This shows that travel and in particular commuting forms the largest contributor to the Agency’s carbon footprint. With the baseline in place, the Agency has put in place a 5% year on year reduction target which will be delivered through the development of a carbon management plan. The installation of a 15KW wind turbine at Renaissance House is a step forward in reducing the Agency’s CO2 impact, as the turbine will bring an estimated saving of 10,000 kg of CO2 annually.
The NWDA’s Sustainable Building Policy sets clear targets for reducing CO2 emissions by NWDA supported construction projects. The policy provides a route to achieve zero carbon, waste and water buildings for NWDA funded buildings by 2020. The Region’s Climate Change Action Plan – shows how the North West will take forward the climate change agenda. In addition to the Climate Change Action Plan, £2m will be invested from the Energy Saving Trust to develop three advice centres to support domestic CO2 reductions. The region’s new ERDF operational plan also targets Sustainable Consumption and Production. A new 3 year £6m, NWDA supported ENWORKS environmental business support project will improve the competitiveness and productivity of Northwest companies by: • Reducing their exposure to environmental risk and; • Improving resource efficiency, reducing CO2 emissions, water and material usage and divert waste from landfill.
Steven Broomhead Chief Executive Officer
24
Remuneration Report
This report for the year ended 31 March 2008 is produced by the Board on the recommendation of the Remuneration and Appointments Committee and deals with the remuneration of the Chair, Chief Executive, Board Members and Executive Directors who have influence over the decisions of the Agency as a whole.
Remuneration and Appointments Committee The Remuneration and Appointments Committee, which includes four members of the Board, met four times during the course of the year to advise the Chairman on the remuneration of the Chief Executive Officer (CEO) and to advise the CEO on Directors' remuneration. In reaching its recommendations, the Remuneration and Appointments Committee is to have regard to the following considerations: • the need to recruit, maintain and motivate suitably able and qualified people to exercise their different responsibilities; • regional/local variations in labour markets and their effects on the recruitment and retention of staff; • the Government's inflation target.
Remuneration Policy The remuneration of the Board is set by the Department for Business, Enterprise and Regulatory Reform (BERR) and is reviewed every year in line with the recommendations of the Senior Salaries Review Board. Performance pay for the Chief Executive is determined by the Chairman on the recommendation of the Remuneration and Appointments Committee. Performance is measured against targets determined by the Chairman following consultation with the Director of the Government Office. These are subject to regular performance monitoring during the year. The amount of the performance award can be up to a maximum of 20% of salary. In 2007/08 the targets related to the financial
objectives of the Agency; the performance targets set by Government; the objectives for the Agency’s lead role with DES/DWP, improving project management, developing sub-regional partnership arrangements and improving the organisation’s overall effectiveness. Performance pay of the senior management team is determined by the Chief Executive on advice from the Remuneration and Appointments Committee. Performance is measured against targets set individually for each Director by the Chief Executive and the amount of the performance award can be up to 10% of salary. Service contracts All Board Members have been appointed on a fixed-term contract and except for the Chairman, Deputy Chairman and Deputy Chair elect are contracted to carry out two days work per month (three days per week for the Chairman and one day per week for the Deputy Chairman and Deputy Chair elect) on behalf of the Agency. Board Members appointments are made in accordance with the Commission of Public Appointments Code. There is no provision in place for the early termination of appointment of Board Members. The Chief Executive Steven Broomhead and all other members of the senior management team are employed under permanent employment contracts. The Chief Executive and senior managers work for the Agency full-time. For the Chief Executive and senior management team early termination, other than for misconduct, will be under the terms of the Civil Service Compensation Scheme.
25
Audited Part of the Remuneration Report Emoluments of Board Members The emoluments of Board Members can be analysed as follows: Name
Bryan Gray (Chairman) Professor Sir Martin Harris* Vanda Murray** Peter Allen David Brockbank John Brooks Joe Dwek Peter Hensman Robert Hough Dr Pauleen Lane Dave McCall Tony McDermott John Merry Professor John Moverley Marie Rimmer Anil Kumar Ruia Brenda Smith Mike Storey Professor Maureen Williams Susan Williams
* Deputy Chairman ** Deputy Chair elect from 1 January 2007
Period of Appointment From To
Salary £
Pension £
Total 2008 £
Total 2007 £
Apr 2002 - Dec 2008 Dec 2001 - Dec 2008 Apr 2006 - Dec 2011 Dec 2007 - Dec 2010 Dec 2004 - Dec 2007 Dec 2007 - Dec 2010 Dec 2003 - Dec 2009 Dec 2004 - Dec 2010 Dec 2007 - Dec 2010 Dec 2001 - Dec 2007 Dec 2003 - Dec 2009 Dec 2007 - Dec 2010 Dec 2004 - Dec 2010 Dec 2004 - Dec 2007 Dec 2002 - Dec 2008 Dec 2001 - Dec 2007 Dec 2001 - Dec 2008 Dec 2001 - Dec 2007 Dec 2002 - Dec 2008 Dec 2007 - Dec 2010
78,931 16,742 16,742 2,479 5,870 2,479 8,371 8,371 2,479 5,870 8,371 2,479 8,371 5,870 8,371 5,870 8,371 5,870 8,371 2,479
28,000 -
106,931 16,742 16,742 2,479 5,870 2,479 8,371 8,371 2,479 5,870 8,371 2,479 8,371 5,870 8,371 5,870 8,371 5,870 8,371 2,479
95,973 16,631 10,394 N/A 8,316 N/A 8,316 8,316 N/A 8,316 8,316 N/A 8,316 8,316 8,316 8,316 8,316 8,316 8,316 N/A
26
Remuneration Report (continued)
Emoluments of the Chief Executive and senior managers The emoluments of the Chief Executive and senior managers can be analysed as follows: Name
Salary for relevant period £
Bonus £
Benefits £
Pension £
2008 Total £
2007 Total £
130,144
19,252
11,936
28,764
190,096
192,558
65,649
-
5,309
16,741
98,103
N/A
100,715
7,588
2,806
25,682
136,791
133,660
66,949
-
5,227
17,072
98,112
N/A
Ian Haythornthwaite Executive Director of Resources
105,961
10,382
5,151
27,020
148,514
142,906
Mark Hughes Executive Director of Enterprise & Skills
104,089
7,872
3,658
26,543
142,162
138,143
Bernice Law (On secondment)
110,865
10,863
1,262
28,271
151,261
146,144
Steven Broomhead Chief Executive Patrick White Executive Director of Policy (appointed 1.8.07) Peter White Executive Director of Development Peter Mearns Executive Director of Marketing (appointed 1.8.07)
Bonus Payments Bonus payments to Senior Managers are linked to the Agency’s performance appraisal system. The performance appraisal year is aligned to the financial year. Payments made in 2007/08 reflect individual’s performance in the 2006/07 financial year.
Benefits in kind Benefits in kind for the Senior Managers consist of lease cars provided by the Agency. There are no loans made to Directors. Board members received no benefits in kind.
Pension benefits Pension benefits of Board Members No Board Members are eligible for pension contributions, performance related pay or any other taxable benefit as a result of employment with the Agency with the exception of the Chairman.
27
Pension benefits of the Chairman With the approval of BERR, a ‘by analogy’ pension scheme has been put in place for the Chairman with contribution rates and benefits which are identical to the Principal Civil Service Pension Scheme but which are funded directly by the Agency. The Agency is not permitted to pay these contributions to a personal pension scheme or other pension plan provider. On retirement, payment of the Chairman's pension will be the responsibility of the Agency, underwritten by BERR.
Bryan Gray Chairman
Real increase in pension £000
Real increase in lump sum £000
Pension at 31 March 2008 £000
Lump sum at 31 March 2008 £000
CETV at 31 March 2007 £000
CETV at 31 March 2008 £000
Real increase in CETV as funded by employer £000
0 – 2.5
0 – 2.5
5.0 – 7.5
0 – 2.5
68
87
15
The ‘by analogy’ arrangement shadows the benefits provided under the Premium scale of the Civil Service Pension Plan. The arrangement provides benefits to the present Chairman and one former Chairman of the Northwest Development Agency. A full actuarial valuation was carried out as at 31 March 2008 by a qualified independent actuary. The major assumptions of the actuary were: Financial Assumptions The inflation assumptions The rate of increase in salaries The rate of increase for pensions in payment and deferred pensions The rate used to discount scheme liabilities
31 March 2008 2.75% 4.3% 2.75% 5.3%
31 March 2007 2.75% 4.3% 2.75% 4.6%
The effect of accrual during year The current service cost(net of employee contributions) Any past service costs Gains and losses on any settlements and curtailments The interest cost
£000’s 21 0 0 7
£000’s 15 0 0 5
Actuarial gains and losses during year Experience losses (gains) Effect of changes in discount rate Effect of changes in mortality assumptions Effect of changes in other demographic and financial assumptions
£000’s 2 (18) 10 0
%age* 1.2% -11.1% 6.2% 0.0%
(6)
-3.7 %
Total actuarial losses (gains)
*Here the amounts are expressed as a percentage of the present value of the scheme liabilities as at the balance sheet date
28
Remuneration Report (continued)
31 March 2008
31 March 2007
Liability (£000’s) Actives Deferreds Pensioners Dependent Pensioners
125 0 37 0
104 0 36 0
Total Present value of the scheme liabilities
162
140
£000’s 140 21 2 7 (6) (2) 0 162
£000’s 94 15 2 5 26 (2) 0 140
Liability calculation Present value of scheme liability at start of year Current Service cost (net of employee contributions) Employee contributions Interest cost Actuarial Losses (gains) Less Benefits paid Less Net Individual Transfers Out Present Value of Scheme Liabilities at end of year
Pension benefits of Chief Executive and senior managers Steven Broomhead, Bernice Law, Ian Haythornthwaite and Mark Hughes are all members of PCSPS Premium Scheme. Peter White and Patrick White are members of the PCSPS Classic Scheme. Peter Mearns is a member of the PCSPS Classic Plus Scheme.
Real increase in pension £000 Steven Broomhead Patrick White Peter White Peter Mearns Ian Haythornthwaite Mark Hughes Bernice Law
0-2.5 0-2.5 0-2.5 0-2.5 0-2.5 0-2.5 0-2.5
Real Pension increase at in lump 31 March sum 2008 £000 £000 N/A 0-2.5 2.5-5 0-2.5 N/A N/A N/A
50-55 10-15 5-10 20-25 40-45 5-10 55-60
Lump sum at 31 March 2008 £000 N/A 35-40 25-30 25-30 N/A N/A N/A
CETV CETV Employee at at contributions 31 March 31 March and 2007 2008 transfers in £000 £000 £000 783 108 180 400 575 39 819
929 151 228 479 675 67 961
2.5-5 0-2.5 0-2.5 7.5-10 2.5-5 2.5-5 2.5-5
Real increase in CETV as funded by employer £000 28 -1 23 11 5 17 21
29
Cash Equivalent Transfer Values A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.
Real increase in CETV This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period. Note: due to certain factors being incorrect in last year’s CETV calculator there may be a slight difference between the final period CETV for 2006/07 and the start of period CETV for 2007/08.
Non Cash remuneration During the year there has been no element of non cash remuneration, except for the benefits in kind of senior managers.
Compensation paid, significant awards to former senior managers During the year there was no compensation paid or significant award to former senior managers.
Amounts payable to third party for services as a senior manager There are no amounts payable to a third party for services as a senior manager.
Payments made for loss of office During the year there were no payments made for loss of office to senior managers.
Bryan M Gray Chairman
Steven Broomhead Chief Executive
30
Statement on Internal Control
Scope of Responsibility As Accounting Officer, I have responsibility for maintaining a sound system of internal control within the Northwest Regional Development Agency. This system supports the achievement of the Agency’s policies, aims and objectives, set by the Board, whilst safeguarding its assets and the public funds that it utilises, for which I am personally responsible, in accordance with the responsibilities assigned to me in Government Accounting and Financial Memorandum. The NWDA is a Regional Development Agency classified as a non-departmental public body of the sponsoring Department for Business, Enterprise and Regulatory Reform (BERR). The Secretary of State is accountable to Parliament for the activities and performance of the Agency. Operational responsibility for monitoring the Agency’s activities rests with the BERR. The NWDA provides comprehensive half yearly reports on performance against targets to GONW for onward transmission to the BERR. The NWDA has corporate responsibility for ensuring that it fulfils the aims and objectives set by the Secretary of State and for promoting the efficient and effective use of its resources. The NWDA is committed to the pursuit of economy, efficiency and effectiveness and constantly seeks to employ best practice in accordance with our Corporate Values. As Accounting Officer, I establish the NWDA’s corporate and business plans in line with the BERR’s wider strategic aims and the Regional Economic Strategy (RES). I advise the Board on the Agency’s performance compared with its aims and objectives and ensure that its governance responsibilities can be discharged in accordance with established guidelines and criteria.
The Purpose of the System of Internal Control The system of internal control is designed to manage risk to a reasonable level rather than eliminate the risk of failure to achieve policies, aims and objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on a continuous process designed to identify and prioritise the risks to the achievement of the Agency’s policies, aims and objectives, to evaluate the likelihood of those risks being
realised and the impact should they be realised, and to manage them efficiently, effectively and economically. This process has been in place in the NWDA for the year ended 31 March 2008 and up to the date of approval of the annual report and accounts and accords with HM Treasury guidance.
Capacity to Handle Risk The Board sets the Agency’s policy and attitude towards risk. The Audit Committee, on behalf of the Board, determines the effectiveness of those policies and procedures, basing its assurance on the reporting of External and Internal Audit as well as the Head of Risk. The Executive Management Board, led by the Chief Executive, is responsible for the operation of the Agency’s corporate risk management process. The Risk and Performance Management Group supports the Executive Management Board and Audit Committee. The corporate risk management process continues to develop under the control of the Head of Risk, Executive Management Board and Audit Committee.
The Risk and Control Framework The main processes which the Agency has in place for identifying, evaluating and managing risk are: (a) Risk Management Strategy Our risk management strategy is updated annually and approved by the Audit Committee. The risk management strategy sets out the Agency’s risk philosophy, its strategy, and risk cycle including risk identification, assessment, how it is addressed and reviewed. (b) Risk Registers Risk registers are maintained where appropriate throughout the Agency, whether this is by project, function or directorate. The most significant risks are elevated through the Risk and Performance Management Group onto the Corporate Risk Register. This is updated quarterly and a new system of formally splitting those risks between the Board and its SubCommittees to improve oversight of all risks has now been introduced.
31
(c) Review of Risk Registers
Project Management System
All risk registers are updated at least quarterly. Within projects they are used as a key business tool and will be updated at each project meeting. Where controls are not considered to be working effectively, further action is put in place. The Executive Management Board and Audit Committee review the Corporate Risk Register on a quarterly basis and make changes as appropriate.
The Agency has continued to develop its project management procedures and capacity during this year.
The European Programme The Agency has taken responsibility for managing the European Regional Development Fund. It has established a team and procedures to manage this.
(d) Risk Appetite The NWDA assesses each objective, project and task on its own merits ensuring that the best available information is used to permit decision makers to identify whether an intended action falls within the risk appetite of the Agency. Key bodies responsible for this at Agency level are: the Board, Board Sub-Committees, the Executive Management Board, and the Programme Review Group.
Significant Internal Control Issues Any significant internal control issues will be dealt with by Executive Management, with advice where appropriate, from the Head of Risk, internal and external audit. There were no significant control issues during the year.
Review of Effectiveness Information and Communication The Board meets eleven times per annum and receives progress reports on significant projects, a monthly Finance Director’s report on the Agency’s financial position, and the Agency’s quarterly performance report that summarises progress against key outcome targets. Board Sub-Committees, including the Audit Committee meet quarterly. The Executive Management Board meets fortnightly to make key decisions, agree actions and specific initiatives and to review financial and operational performance.
As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control. My review of the effectiveness of the system of internal control is informed by the work of the Internal Auditors and the executive directors within the Agency who have responsibility for the development and maintenance of the internal control framework, and comments made by the External Auditors in their management letter and other reports. I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Board and the Audit Committee, and a plan to address weaknesses and ensure continuous improvement of the system is in place.
Key decisions made and actions agreed are communicated to managers via a monthly Core Briefing session and cascaded to all staff through regular team meetings. Specific policies and procedures are approved by the Executive Management Board and delivered to the relevant teams through induction training, team meetings, and via email and the Intranet. These address issues such as project appraisal and monitoring, financial management and control, procurement and legislation, for example the Freedom of Information Act.
Steven Broomhead Accounting officer
July 2008
32
THE CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT AND THE NORTHWEST REGIONAL DEVELOPMENT AGENCY I certify that I have audited the financial statements of the Northwest Development Agency (the Agency) for the year ended 31 March 2008 under the Regional Development Agencies Act 1998. These comprise the Income and Expenditure Account, the Balance Sheet, the Cash Flow Statement and Statement of Recognised Gains and Losses and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited. Respective responsibilities of the Agency, Chief Executive/Accounting Officer and Auditor The Agency and Chief Executive as Accounting Officer are responsible for preparing the Annual Report, the Remuneration Report and the financial statements in accordance with the Regional Development Agencies Act 1998 and Secretary of State directions made thereunder and for ensuring the regularity of financial transactions. These responsibilities are set out in the Statement of the Agency’s and Accounting Officer’s Responsibilities. My responsibility is to audit the financial statements and the part of the Remuneration Report to be audited in accordance with relevant legal and regulatory requirements, and with International Standards on Auditing (UK and Ireland). I report to you my opinion as to whether the financial statements give a true and fair view and whether the Financial Statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with the Regional Development Agencies Act 1998 and Secretary of State directions made thereunder. I report to you whether, in my opinion, the information, which comprises the Chairman’s Statement, the Chief Executive’s Review, the Operating Review, the Governance Review, the Environmental Policy Statement, the Director’s Report and the unaudited part of the Remuneration Report, included in the Annual Report is consistent with the financial statements. I also report whether in all material respects the expenditure and income have been applied to the purposes intended by
Parliament and the financial transactions conform to the authorities which govern them. In addition, I report to you if the Agency has not kept proper accounting records, if I have not received all the information and explanations I require for my audit, or if information specified by HM Treasury regarding remuneration and other transactions is not disclosed. I review whether the Statement on Internal Control reflects the Agency’s compliance with HM Treasury’s guidance, and I report if it does not. I am not required to consider whether this statement covers all risks and controls, or form an opinion on the effectiveness of the Agency’s corporate governance procedures or its risk and control procedures. I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises the Chairman’s Statement, the Chief Executive’s Review, the Operating Review, the Governance Review, the Environmental Policy Statement, the Director’s Report and the unaudited part of the Remuneration Report. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements. My responsibilities do not extend to any other information.
Basis of audit opinions I conducted my audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. My audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the Financial Statements and the part of the Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgments made by the Agency and Accounting Officer in the preparation of the financial statements, and of whether the accounting policies are most appropriate to the Agency’s circumstances, consistently applied and adequately disclosed. I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements and the part of the Remuneration Report to
33
be audited are free from material misstatement, whether caused by fraud or error, and that in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the Financial Statements and the part of the Remuneration Report to be audited.
Opinions
Opinion on Regularity In my opinion, in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.
Report I have no observations to make on these financial statements.
In my opinion: • the financial statements give a true and fair view, in accordance with the Regional Development Agencies Act 1998 and directions made thereunder by the Secretary of State, of the state of the Northwest Development Agency’s affairs as at 31 March 2008 and of its net expenditure for the year then ended; • the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with the Regional Development Agencies Act 1998 and directions made thereunder by the Secretary of State; and • information, which comprises the Chairman’s Statement, the Chief Executive’s Review, the Operating Review, the Governance Review, the Environmental Policy Statement, the Director’s Report and the unaudited part of the Remuneration Report, included within the Annual Report is consistent with the financial statements.
T J Burr Comptroller and Auditor General National Audit Office 151 Buckingham Palace Road Victoria London SWIW 9SS
34
Financial Statements Group income & expenditure account For the year ended 31 March 2008 2008 £000
Restated 2007 £000
Income Small Business Service funding European funding Coalfield and other government grants Rents and maintenance charges Claw-back of grant and contributions Proceeds from disposal of Investment Properties Proceeds from disposal of Investments Proceeds from disposal of Development Assets Northern Way income Income from Joint Venture - NorwePP Other income
22,187 6,970 2,985 6,115 9,057 13,935 1,020 5,653
375 5,926 9,167 9,724 12,236 7,957 4,100 1,436 8,349 3,260
Total Income
67,922
62,530
174,158 158,790 16,296 45,403 22,127 13,708 5 8,302 8 4,835 5,478 (5,241) (22) 68 18,311
174,809 190,644 40,713 20,137 19,520 2 6,848 2,000 775 529 15,109 (956) (7,606) (581) 96 709
462,226
462,748
(394,304)
(400,218)
(14) 7,577 (6,021)
(29) 3,959 (5,402)
(392,762)
(401,690)
Note
Expenditure Grants paid for programme expenditure – public sector Grants paid for programme expenditure – private sector European funding expenditure Non-grant programme expenditure Salaries and wages Other administrative costs Book value of Operating Assets disposed Book value of Investment Properties disposed Book value of Investments disposed Book value of Development Assets disposed Asset valuation write-down – Operating Assets Asset valuation write-down – Investments Asset valuation write-down – Development Assets Asset valuation write-back – Investments Asset valuation write-back – Development Assets Movements in provisions Bad debts and movements in provision for bad and doubtful debts Operating costs in relation to subsidiaries
2 2 2 2 6 3 12 13 17 12 14 17 17 21
Total Expenditure Net expenditure on operations Interest payable Interest receivable Notional cost of capital
4 5 9
Net expenditure on ordinary activities Taxation
10
Net expenditure after tax
(8) (392,770)
Reversal of notional cost of capital
9
Net expenditure taken to reserves
24
All activities are from continuing operations. Net expenditure is financed by Grant in Aid as explained in accounting policy note 1. The notes on pages 39 to 72 form part of these accounts.
6,021 (386,749)
(401,690) 5,402 (396,288)
35
Group statement of recognised gains and losses For the year ended 31 March 2008
Revaluation on Investment and Development Property Assets Revaluation on Operating Assets Movement in the share of Net Assets for Joint Ventures and Associates Actuarial gain (loss) on FRS17 pension scheme Gains and losses recognised for the year
The notes on pages 39 to 72 form part of these accounts.
Note
2008 ÂŁ000
2007 ÂŁ000
13,17
4,649
27,221
12
19
-
15,22 22
(1,168) 6 3,506
2,276 (26) 29,471
36
Financial Statements (continued) Group balance sheet As at 31 March 2008
Fixed Assets Intangible Operating Assets Tangible Operating Assets Investment Properties Investments Investments in Joint Ventures: Share of gross Assets Share of gross Liabilities Investments in Associates Long-Term Loans
Current Assets Development Assets Debtors Cash at bank and in hand
Creditors: Amounts falling due within one year
Note
2008 ÂŁ000
Restated 2007 ÂŁ000
11 12 13 14
823 4,040 22,833
462 3,319 23,870
15 15 15 16
79,040 (77,971) 40 103,839
82,386 (80,174) 65 109,960
132,644
139,888
84,384 31,948 73,578
88,034 38,273 58,747
189,910
185,054
(173,957)
(176,292)
17 18
19
Net Current Assets
15,953
8,762
Creditors: Amounts falling due after more than one year
20
(22,265)
(20,901)
Provisions For Liabilities And Charges
21
(9,322)
(12,749)
Total Assets Less Total Liabilities excluding Pension Liability
117,010
FRS17 Pension Liability (see Remuneration Report)
(162)
Total Assets Less Total Liabilities Reserves General Reserve Revaluation Reserve Grant in Aid Reserve
22 23 24
The notes on pages 39 to 72 form part of these accounts.
(140)
116,848
114,860
31,143 65,653 20,052
20,133 63,261 31,466
116,848
114,860
These financial statements were approved by the Board on 10th July 2008.
Bryan M Gray Chairman
115,000
Steven Broomhead Chief Executive
37
Agency Balance sheet As at 31 March 2008
Fixed Assets Intangible Operating Assets Tangible Operating Assets Investment Properties Investments Investments in Subsidiaries Investments in Joint Ventures Investments in Associates Long-Term Loans
Current Assets Development Assets Debtors Cash at bank and in hand
Creditors: Amounts falling due within one year
11 12 13 14 15 15 15 16
17 18
19
2008 ÂŁ000
Restated 2007 ÂŁ000
823 2,403 22,833 4,760 1,069 40 103,839
462 3,319 23,870 2,212 65 109,960
135,767
139,888
84,384 29,897 72,041
88,034 38,208 58,702
186,322
184,944
(174,824)
(176,182)
11,498
8,762
Net Current Assets Creditors: Amounts falling due after more than one year
20
(22,265)
(20,901)
Provisions For Liabilities And Charges
21
(9,322)
(12,749)
115,678
115,000
(162)
(140)
115,516
114,860
31,143 65,653 18,720
20,133 63,261 31,466
115,516
114,860
Total Assets Less Total Liabilities excluding Pension Liability FRS17 Pension Liability (see Remuneration Report) Total Assets Less Total Liabilities Reserves General Reserve Revaluation Reserve Grant in Aid Reserve
22 23 24
These financial statements were approved by the Board on 10th July 2008.
Bryan M Gray Chairman The notes on pages 39 to 72 form part of these accounts.
Steven Broomhead Chief Executive
38
Financial Statements (continued) Group cash flow statement For the year ended 31 March 2008 2008 £000 (387,827)
2007 £000 (338,101)
1,020
-
5 4
7,577 (14)
3,959 (29)
10
(8)
-
11 12
(701) (2,096) (3,847) (6,119) 9,057 12,000
(130) (1,775) (297) (6,259) (21,541) 7,957 4,100 1,436 12,800
(370,958)
(337,880)
381,000 4,386 (105)
369,000 7,638 268
Increase in Cash
14,323
39,026
Net liquid funds at 1 April 2007
58,747
19,721
Net liquid funds as at 31 March 2008
73,070
58,747
2008 £000
2007 £000
73,578 (508)
58,747 -
73,070
58,747
Net Cash Outflow from Operating Activities Dividends from Joint Ventures and Associates Dividends received from Joint Ventures Returns on Investments and Servicing Of Finance Interest Received Interest Paid Taxation UK Corporation Tax paid Capital Expenditure and Financial Investment Purchase of Fixed Intangible Operating Assets Purchase of Fixed Tangible Operating Assets Purchase of Investment Properties Purchase of Investments Purchase of Development Assets Proceeds from disposal of Investment Properties Proceeds from disposal of Investments Proceeds from disposal of Development Assets Repayment of Loan Note
14 17
16
Net Cash Outflow before Financing Financing Grant in Aid received EU financing for Assets Coalfields financing for Assets
24 22 22
Reconciliation of Liquid Funds Cash at bank and in hand Overdraft
The notes on pages 39 to 72 form part of these accounts
39
Notes to the financial statements Reconciliation of net operating expenditure to net cash outflow from operating activities Note
Net expenditure on operations Less Dividends from Joint Ventures Decrease/(Increase) in debtors Adjustment for capital debtors (Increase)/Decrease in creditors and provisions Depreciation and amortisation Transfer from General Reserve EU funded assets Actuarial gain/(loss) on FRS17 Pension Scheme Loss/(profit) on disposal of fixed Operating Assets Loss/(profit) on disposal of Investment Properties Loss/(profit) on disposal of Investments Loss/(profit) on disposal of Development Assets Operating Assets valuation write-down Investments valuation write-down Development Asset valuation write-down Investments valuation write-back Development Asset valuation write-back Net cash outflow from operating activities
18 19,20,21 11,12
12 14 17 17
2008
2007
ÂŁ000 (394,304) (1,020)
ÂŁ000 (400,218) -
6,325 (4,884) 1,722 6 5 (757) 8 4,835 5,478 (5,241)
(16,202) 10,508 63,293 1,335 (2,624) (26) 2 (1,109) (2,100) (661) 529 17,734 (956) (7,606)
(387,827)
(338,101)
40
Notes (continued)
1.
Accounting policies
1.1
Basis of Accounting
The Financial Statements of the Northwest Regional Development Agency have been prepared in a form directed by the Secretary of State for Business, Enterprise and Regulatory Reform, with the approval of H M Treasury, in accordance with the Regional Development Agencies Act 1998. The Financial Statements have been prepared as set out in Treasury guidance and the Accounts Direction under the modified historical cost basis as explained in the subparagraphs below and in accordance with applicable Accounting Standards. The Agency was issued with a new Accounts Direction on 26 March 2008 which is effective for the 2007-08 financial year. 1.2 Basis of Consolidation A separate income and expenditure account is not presented for the Agency as provided by Section 230 of the Companies Act 1985. The consolidated accounts incorporate the accounts of the Agency and its subsidiary undertakings North West Business Link Limited, Estuary Management Company Limited, Norwepp (NWDA Subsidiary) Limited and Rural Regeneration Cumbria Limited. Joint ventures relating to Renewables North West Limited, New East Manchester Limited, Liverpool Land Development Company Limited, ReBlackpool Urban Regeneration Company Limited, Norwepp Limited Partnership and Norwepp (General Partner) Limited have been accounted for on a gross equity accounting basis. Investments in associate undertakings relating to Liverpool Vision Limited, Furness West Cumbria New Vision URC Limited, Brunswick Business Park Limited, Maryport Developments Limited, Elevate East Lancashire Limited, Cumbria Vision Limited, Daresbury Science and Innovation Campus Limited and Hadrians Wall Heritage Limited have been consolidated on an equity accounting basis. 1.2 Properties Land and buildings held as tangible operating assets, industrial and commercial investment properties, or properties in the course of development are shown in the balance sheet at open market value. Valuations have been carried out in accordance with the RICS Valuation Standards (6th. Edition) published by the Royal Institution of Chartered Surveyors. A valuation of the whole portfolio was carried out as at 31 December 2007 by King Sturge, Chartered Surveyors. This valuation is not materially different to the value at 31 March 2008. Acquisitions and disposals of land and buildings are accounted for on the date of legal completion. 1.3 Development Assets Development Assets, consisting of land and buildings, are held short-term for disposal. They are shown at the lower of current replacement cost and net realisable value, any reductions in carrying value being written off to the Income & Expenditure Account. Movements arising on the revaluation of development assets in excess of historical cost are reflected in the Revaluation Reserve, after eliminating the overall accumulated unrealised deficit, as originally charged to the Income and Expenditure Account. Acquisitions and disposals of Development Assets are accounted for on the date of legal completion.
41
1.4 Investments Loan investments in Venture Capital Trusts are shown at cost and net of provision for amounts considered doubtful and of write-offs for amounts considered irrecoverable. Provision has been made for all loans where recovery appears doubtful. No loan is written off until the impossibility of recovery is beyond doubt. Approval from BERR is obtained for any write-off in excess of £250,000. Returns on loan investments in Venture Capital Trusts are shown at market value over and above the value of the loan. Movements arising on the revaluation of investments are reflected in the revaluation reserve, except for impairments and reductions in value below historical cost, which are reported in the income and expenditure account. 1.5 Tangible Operating Assets and Intangible Assets Fixed operating assets are valued at depreciated replacement cost as current cost adjustments are not material. Software licences are capitalised as intangible assets on the same basis. Assets are capitalised where the cost exceeds £500 on a grouped basis where appropriate. 1.6 Depreciation and amortisation Depreciation and amortisation is provided to write-off the replacement cost of intangible and tangible fixed assets over their anticipated useful lives on a straight line basis at the following annual rates: Owned property Leasehold buildings with less than 25 years to run Office furniture, fittings and equipment Computer equipment Software licences
50 years Period of lease 5 years 3 years 3 years
1.7 Pension Costs Employees of the Agency participate in the following defined benefit schemes: Principal Civil Service Pension Scheme (PCSPS) and the English Partnerships Pension Scheme (EPPS). These are multi-employer schemes in which it is impossible to identify the share of the underlying assets and liabilities relating to the Agency. Employer contributions to these schemes are accounted for in the period to which they relate. The ‘by analogy’ scheme is for Chairs past and present with rules equivalent to those of PCSPS. The arrangement is a UK-based benefit promise made by the employer, providing benefits at retirement and on death-in-service. The arrangement is unfunded and the employer pays benefits as and when they arise. Further details are provided in the remuneration report. The scheme is subject to regular valuations by independent, professionally qualified actuaries. These determine the level of contributions required to fund future benefits. Differences between actual and expected returns on assets during the year are recognised in the Statement of Recognised Gains and Losses, together with differences arising from changes in actuarial assumptions.
42
Notes (continued)
1.8 Government Grants The Agency’s activities are funded primarily by Grants in Aid provided by The Department for Business, Enterprise & Regulatory Reform for specified types of expenditure. Grants in Aid used to finance activities and expenditure which support the statutory and other objectives of the Agency are treated as financing and are credited to the Grant in Aid Reserve as they are regarded as contributions from a controlling party. Grants relating to capital expenditure used to acquire specific capital items is credited to Grant in Aid Reserve. 1.9 European Grants The Agency’s activities are funded in part by European Funding for specified types of expenditure. European Funding Grants receivable of a revenue nature are credited to the Income & Expenditure Account in the year to which they relate. European Funding Grants in respect of capital expenditure are credited to the General Reserve and released to the Income & Expenditure Account either over the expected useful life of the asset for assets that are depreciated or, upon disposal or loss in value, for assets that are not depreciated. 1.10 Deferred Taxation Full provision has been made for deferred tax liabilities arising from timing differences between the recognition of gains and losses in the Financial Statements and their recognition in the tax computation. In accordance with FRS19 a deferred tax asset is only recognised if there is sufficient evidence that it is likely to be recoverable at the balance sheet date. 1.11 Foreign Currency Transactions Transactions in foreign currencies are recorded in sterling at the rates prevailing at the date of transaction. Monetary assets and liabilities in foreign currency are translated into sterling at the rates prevailing at the Balance Sheet date. Resulting exchange gains and losses are taken to the Income & Expenditure Account. 1.12 Leases Operating lease rentals are charged to the Income & Expenditure Account over the period of the lease. There are no finance leases. 1.13 Financial Instruments The Agency has no borrowings and relies primarily on departmental Grant in Aid for its cash requirements and is therefore not exposed to liquidity risks. It has no material deposits and all material assets and liabilities are denominated in sterling, so there is no exposure to interest rate risk or currency risk. Transactions entered into which result in debtors due after more than one year have a low credit risk. 1.14 Operating Income Operating Income is recognised on a receivable basis.
43
1.15 Grants Payable Grants payable are recognised in the period in which the underlying event or activity giving entitlement to the grant occurs. 1.16 Grant Repayments Grant repayments are recognised as income on a receivable basis. The Agency’s entitlement to grant repayment would crystallise in the event of any breach of grant conditions. 1.17 Provisions The Agency makes provision for liabilities and charges in accordance with FRS12 where, at the balance sheet date, a legal or constructive liability (i.e. a present obligation from past events) exists, the transfer of economic benefits is probable and a reasonable estimate of the obligation can be made. 1.18 VAT Irrecoverable VAT is written off to the Income and Expenditure Account.
44
Notes (continued) 2.
Analysis of programme expenditure by key driver
Programme Expenditure as shown in Group I&E: Grants paid for programme expenditure – public sector Grants paid for programme expenditure – private sector European funding expenditure Non-grant programme expenditure
Programme Expenditure Analysis by Key Driver: Business Skills & Education People & Jobs Infrastructure Quality of Life Regional Research Legacy
Total expenditure recorded in I & E Account 2008 £000
Total expenditure recorded in I & E Account 2007 £000
174,158 158,790 16,296 45,403
174,809 190,644 40,713
394,647
406,166
115,686 10,722 130,115 53,072 62,859 1,211 20,982
114,561 7,164 101,173 85,309 50,901 390 46,668
394,647
406,166
2008 £000 1,394 3,399 47 2,903 1,559 1,282 761 1,156 1,130 77 -
2007 £000 3,944 2,483 4,245 11 2,375 1,544 922 1,410 915 1,335 161 75 100
13,708
19,520
3. Other administration costs Professional costs Marketing and PR Estate management Non-recoverable VAT Office costs Operating lease rentals Other staff costs IT and communication Travel and subsistence Depreciation and amortisation Contributions to Joint Ventures External auditors’ remuneration – statutory audit – IPA audit
Other administration costs are significantly lower than previous years. The main reason for this is the reduction in Estates management costs following the transfer of the Agency’s property portfolio to a Public Private Partnership company.
45
4.
Interest payable
Other interest
5.
2007 £000
14
29
2008 £000
2007 £000
4,989 2,546 6 36
2,027 1,900 32
7,577
3,959
2008 £000
2007 £000
213 28 18
206 20 16
259
242
15,668 3,087 1,418 464
14,002 2,742 1,215 574
20,637
18,533
855 376
977 385
1,231
1,362
22,127
20,137
Interest receivable
Interest on Loan Notes – NorwePP (see Note 26) Bank interest receivable Interest on investments Other interest
6.
2008 £000
Salaries and wages
Board Members Board members salaries Chair’s pension contributions Social security costs
Staff Salaries and wages Pension costs Social security costs Redundancy costs
Temporary staff Recruitment agency staff Seconded staff salary costs
Total salaries and wages
46
Notes (continued)
7.
Staff numbers
The average number of staff employed by the Agency during the year (including all seconded staff) was 431 (2007: 402). The figures do not include recruitment agency staff. A. Agency
Department
2008 Senior Management
2008 Staff
2008 Seconded In Staff
2008 Total
2007 Total
2 1 1 1 1 1 -
7 17 24 11 119 38 44 154 7
1 1 1 -
9 17 25 11 121 39 46 156 7
11 12 114 123 30 33 79 -
7
421
3
431
402
Chief Executive’s Office Human Resource Development Operations Marketing Tourism Enterprise and Skills Development Policy Infrastructure Resources National Secretariat
During the year there was a directorate restructuring which resulted in the following changes: 1. The Operations directorate was dissolved and parts subsumed by the Resources directorate and by the Policy directorate. The remainder was sub-divided into two new directorates: Marketing Tourism 2. Corporate Resources directorate has been renamed Resources Enterprise, Innovation and Skills directorate has been renamed Enterprise and Skills Infrastructure and Development directorate has been renamed Development.
B. Subsidiaries – All Administration
Northwest Business Link Limited
2008 Total
2007 Total
227
-
47
Notes (continued)
8. Pension arrangements Principal Civil Service Pension Scheme (PCSPS) The PCSPS scheme is an unfunded multi-employer defined benefit scheme but NWDA is unable to identify its share of underlying assets and liabilities. The scheme actuary valued the scheme as at 31 March 2007. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservice-pensions.gov.uk). For 2007/08, employers' contributions of £2,894,886 were payable to the PCSPS (2006/07 £2,565,633) at one of four rates in the range 17.1% to 25.5% of pensionable pay, based on salary bands. The Scheme Actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates reflect benefits as they accrue, not the costs as they are actually incurred, and reflect past experience of the scheme. From 1 October 2002, civil servants may be in one of three statutory based "final salary" defined benefit schemes (classic, premium, and classic plus). New entrants after 1 October 2002 could choose between membership of premium or joining a good quality "money purchase" stakeholder arrangement with a significant employer contribution (partnership pension account). From 30 July 2007 new entrants may choose between the new nuvos “career average” defined benefit scheme or the partnership pension account. All the schemes, apart from the partnership pension account, are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus and nuvos are increased annually in line with changes in the Retail Prices Index. Classic Scheme Benefits accrue at the rate of 1/80th of pensionable salary for each year of service. In addition, a lump-sum equivalent to three years pension is payable on retirement. Members pay contributions of 1.5% of pensionable earnings. On death, pensions are payable to the surviving spouse at a rate of half the member's pension. On deathin-service, the scheme pays a lump-sum benefit of twice pensionable pay and also provides a service enhancement on computing the spouse’s pension. The enhancement depends on length of service and cannot exceed 10 years. Medical retirement is possible in the event of serious ill health. In this case, pensions are brought into payment immediately without actuarial reduction and with service enhanced as for widow(er) pensions. Premium Scheme Benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump-sum, but members may commute some of their pension to provide a lump-sum up to a maximum of 3/80ths of final pensionable earnings for each year of service or 2.25 times pension if greater (the commutation rate is £12 of lump-sum for each £1 of pension given up). For the purposes of pension disclosure the tables assume maximum commutation. Members pay contributions of 3.5% of pensionable earnings. On death, pensions are payable to the surviving spouse or eligible partner at a rate of 3/8ths the member's pension (before any commutation). On death-in-service, the scheme pays a lump-sum benefit of three times pensionable earnings and also provides a service enhancement on computing the spouse’s pension. The enhancement depends on length of service and cannot exceed 10 years. Medical retirement is possible in the event of serious ill health. In this case, pensions are brought into payment immediately without actuarial reduction. Where the member’s ill health is such that it permanently prevents them undertaking any gainful employment, service is enhanced to what they would have accrued at age 60. Classic Plus Scheme This is essentially a variation of premium, but with benefits in respect of service before 1 October 2002 calculated broadly as per classic.
48
Notes (continued)
Nuvos Scheme Benefits accrue at the rate of 2.3% of pensionable salary for each year of service. Members pay contributions of 3.5% of pensionable earnings. The maximum pension payable is 75% of pensionable earnings. Members may commute part of their pension for a lump-sum up to a maximum calculated as the member’s pension multiplied by 30 and divided by 7 (the commutation rate is £12 of lump-sum for each £1 of pension given up). The scheme has a pension age of 65. On death, pensions are payable to the surviving spouse at a rate of 37.5% of the member’s pension. On death-in-service, the scheme pays a lump-sum benefit of twice pensionable pay and also provides a service enhancement on computing the spouse’s pension. Where the member’s ill health permanently prevents them undertaking any gainful employment, service may be enhanced to what they would have accrued at age 65. Pensions payable under classic, premium, classic plus and nuvos are increased in line with the Retail Prices Index. Further details about the CSP arrangements can be found at the website www.civilservice-pensions.gov.uk. Partnership Pension Scheme Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. The employer makes a basic contribution of between 3% and 12.5% (depending on the age of the member) into a stakeholder pension product chosen by the employee. The employee does not have to contribute but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.8% of pensionable salary to cover the cost of centrally provided risk benefit cover (death-in-service and ill health retirement). In 2007/08 employers' contributions of £35,578 (2006/07 £28,720) were paid to one or more of a panel of three appointed stakeholder pension providers. English Partnerships Pension Scheme Former employees of English Partnerships participate in the English Partnerships Pension Scheme. The English Partnerships Scheme is a multi-employer defined benefit scheme but NWDA is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 2007 and more details can be found in the separate scheme statement of the English Partnerships Pension Scheme. For 2007/08, normal employer contributions of £143,673 were payable to the English Partnerships Pension Scheme (2006/07 £148,352) at the rate of 23.8% of pensionable pay (2006/07 23.8%). It has been agreed that contributions will be reviewed on an annual basis although the Actuary conducts a full revaluation of the fund every three years. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and they reflect past experience of the scheme. At the Balance Sheet date there were no outstanding or prepaid contributions to the scheme.
9.
Notional cost of capital
When calculating the net expenditure for the year, the Agency is required to include a notional cost of capital as expenditure, to the extent that there is no real charge for this. This has been calculated as 3.5% (2006/07: 3.5%) of the average of total assets less total liabilities. After net expenditure for the year there is an entry reversing this amount.
49
10. Taxation a) Analysis of the tax charge/(credit) in year: 2008 £000
2007 £000
Current taxation Adjustments relating to previous year
8
-
Deferred taxation Deferred Tax provision
-
-
8
-
2008 £000
2007 £000
Net income/(expenditure) on ordinary activities
(392,762)
(401,690)
Net income/(expenditure) on ordinary activities multiplied by standard rate of corporation tax in the UK of 20% (Business Link) & 30% (NWDA) (2007: NWDA 30%; Business Link N/A)
(118,249)
(120,507)
(832) 1,806 (17,669) 117,945 8,278 39 (2) (1) 6,893 1,800 -
1,620 (131,336) 116,981 4,259 (32) 5 2,408 3,647 6,194 (2,228) 118,989
8
-
b) Factors affecting the tax charge/(credit) for the year
Effect of: Income not subject to corporation tax (Business Link) Notional cost of capital Non taxable grant funding Non relievable grant funded expenditure Expenses not deductible for tax purposes Depreciation for the year in excess of capital allowances Other timing differences Restriction on development assets written off Accounting profit in excess of capital gain arising on disposal of investment assets Creation / (utilisation) of tax losses Rate change Permanent differences Grant in Aid adjustment
A potential deferred tax asset totalling £24.9m has been calculated by the Agency’s tax advisers for 2007/08 largely as a result of accumulated tax losses. It is not considered probable that taxable profits will arise in the future to utilise these losses. For this reason, in accordance with FRS19, an asset has not been recognised in the accounts.
50
Notes (continued)
11. Intangible operating assets Group: Software Licences £000
Agency: Software Licences £000
798 701
798 701
1,499
1,499
Amortisation As at 1 April 2007 Amortisation in year
336 340
336 340
As at 31 March 2008
676
676
Net Book Value As at 31 March 2008
823
823
As at 31 March 2007
462
462
Group computer equipment £000
Total £000
Cost As at 1 April 2007 Additions in year As at 31 March 2008
12. Tangible operating assets Group land & buildings £000
Group fixtures & fittings £000
Cost or Valuation As at 1 April 2007 Additions in year Impairment Disposals in year
1,045 27 (8) -
4,209 276 (2,630)
4,269 1,793 (2,342)
9,523 2,096 (8) (4,972)
As at 31 March 2008
1,064
1,855
3,720
6,639
30 (19) -
3,391 398 (2,628)
2,813 954 (2,340)
As at 31 March 2008
11
1,161
1,427
2,599
Net Book Value As at 31 March 2008
1,053
694
2,293
4,040
As at 31 March 2007
1,045
818
1,456
3,319
Depreciation As at 1 April 2007 Depreciation in year Depreciation write-back on revaluation Disposals in year
6,204 1,382 (19) (4,968)
51
12. Tangible operating assets (continued) Agency land & buildings £000
Agency fixtures & fittings £000
Agency computer equipment £000
Total £000
Cost or Valuation As at 1 April 2007 Additions in year Impairment Disposals in year
1,045 (8) -
4,209 (41) (2,634)
4,269 374 (2,804)
As at 31 March 2008
1,037
1,534
1,839
21 (19) -
3,391 305 (2,628)
2,813 464 (2,340)
As at 31 March 2008
2
1,068
937
2,007
Net Book Value As at 31 March 2008
1,035
466
902
2,403
As at 31 March 2007
1,045
818
1,456
3,319
Depreciation As at 1 April 2007 Depreciation in year Depreciation write-back on revaluation Disposals in year
9,523 333 (8) (5,438) 4,410
6,204 790 (19) (4,968)
The Net Book Value of tangible operating assets does not differ materially from the depreciated replacement cost of the assets.
13. Investment properties Group 2008 £000 Cost or valuation As at 1 April Additions Disposals Transfers to NorwePP Limited Partnership (see Note 26) Transfers to Development Assets Revaluations
-
As at 31 March
-
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
95,018 297 (6,848) (104,203) (5,181) 20,917
-
95,018 297 (6,848) (104,203) (5,181) 20,917
-
-
-
52
Notes (continued)
14. Investments held as fixed asset investments North West BIS £000
Group and Agency North West Rising Seed Fund Stars £000 £000
Total £000
Cost As at 1 April 2007 Additions in year Disposals and repayments in year
15,711 4,912 (2,507)
3,673 225 -
7,308 1,217 -
26,692 6,354 (2,507)
As at 31 March 2008
18,116
3,898
8,525
30,539
Provisions As at 1 April 2007 Movement in provision
(1,826)
(1,402) (992)
(1,469) (2,017)
(2,871) (4,835)
As at 31 March 2008
(1,826)
(2,394)
(3,486)
(7,706)
Net Book Value As at 31 March 2008
16,290
1,504
5,039
22,833
Valuation as at 31 March 2008
16,290
1,504
5,039
22,833
Net Book Value As at 31 March 2007
15,711
2,271
5,839
23,821
Valuation as at 31 March 2007
15,760
2,271
5,839
23,870
75.00%
80.00%
37.90%
Agency Interest
The Agency has loan investments in the North West Business Investment Scheme (BIS), the North West Seed Fund and the Rising Stars Growth Fund. These limited liability partnerships provide funding, in the form of loans and equity, to small businesses in the Northwest region. After recovery of the loan investment, the Agency is entitled to a return on investments equivalent to its interest in the fund as shown above. The BIS has been primarily funded by the European Union with the objective of making equity based investments in SMEs in the Northwest region.
53
15. Interests in subsidiaries, associates and joint ventures Subsidiaries Name
Interest
Nature
Type
Estuary Management Company Limited
100%
Provision of Services at the Estuary Commerce Park
Company Limited by Guarantee
Rural Regeneration Cumbria Limited
81%
Regeneration for Furness and Cumbria
Company Limited by Guarantee
NorwePP (NWDA Subsidiary) Limited
100%
Shareholder in NorwePP (General Partner) Limited
Private Limited Company
North West Business Link Limited
100%
Business support, advice and information service
Company Limited by Guarantee
Name
Interest
Nature
Type
Renewables NorthWest Limited
50%
Development of Initiatives for Renewable Energy
Company Limited by Guarantee
New East Manchester Limited
33.333%
Regeneration of East Manchester
Company Limited by Guarantee
Liverpool Land Development Company Limited
33.333%
Regeneration of Strategic Investment Areas in Liverpool
Company Limited by Guarantee
ReBlackpool URC Limited
50%
Regeneration of Blackpool
Company Limited by Guarantee
Central Salford URC Limited
33.333%
Regeneration of Central Salford
Company Limited by Guarantee
NorwePP Limited Partnership
49.95%
Investment in properties in the Northwest
Limited Liability Partnership
General partner of NorwePP Limited Partnership
Private Limited Company
Joint Ventures
NorwePP (General Partner) 50% Limited
54
Notes (continued)
Associates Name
Interest
Nature
Type
Liverpool Vision Limited URC
33.333%
Urban Regeneration of Liverpool
Company Limited by Guarantee
Furness West Cumbria New Vision URC Limited
20%
Regeneration of West Cumbria
Company Limited by Guarantee
Maryport Developments Limited
20.4% ordinary Management of the Development share capital of Maryport Harbour 100% preference share capital
Private Limited Company
Elevate East Lancashire Limited
12.5%
Company Limited by Guarantee
Cumbria Vision Limited
12.5%
To develop an integrated and coherent strategy for housing market renewal Regeneration of Cumbria
Daresbury Science and Innovation Campus Limited
16.667%
Management of Daresbury Innovation Campus
Company Limited by Guarantee
Hadrians Wall Heritage Limited
25%
Regeneration of the Hadrian’s Wall World Heritage Site
Company Limited by Guarantee
Private Limited Company
55
15. Interests in subsidiaries, associates and joint ventures (continued) Key Financial Results of Subsidiaries 2008 Total £000
2008 Agency Share £000
£000
2007 Agency Share £000
-
-
-
-
Estuary Management Company Limited Profit/(loss) for the year after taxation Rural Regeneration Cumbria Limited Profit/(loss) for the year after taxation North West Business Link Limited Profit for the year after taxation
-
-
4,760
4,760
Total Profit/(Loss) of Subsidiaries for the year after taxation
4,760
4,760
2007 Total
(12) -
(12)
(10) -
(10)
Norwepp (NWDA Subsidiary) Limited did not trade during the year. North West Business Link Limited commenced trading on 1 April 2007. Rural Regeneration Cumbria Limited ceased trading on 31 August 2006. The Estuary Management Company Limited is a non-profit making company. Any surplus/deficit is returned to/recovered from the tenants. 2008 Total
Amounts due by the Agency to: Estuary Management Company Limited North West Business Link Limited
£000
2008 Agency Share £000
2007 Total £000
2007 Agency Share £000
2,265
2,265
52 -
52 -
There were no balances between the Agency and Rural Regeneration Cumbria Limited or Norwepp (NWDA Subsidiary) Limited. Investments in Net Assets of Subsidiaries 2008 Total
Gross Assets Estuary Management Company Limited Rural Regeneration Cumbria Limited Norwepp (NWDA Subsidiary) Limited North West Business Link Limited
£000
2008 Agency Share £000
2007 Total £000
2007 Agency Share £000
95 1 7,451
95 1 7,451
110 1 -
110 1 -
7,547
7,547
111
111
56
Notes (continued)
15. Interests in subsidiaries, associates and joint ventures (continued) Investments in Net Assets of Subsidiaries (continued) 2008 Total
Gross Liabilities Estuary Management Company Limited Rural Regeneration Cumbria Limited Norwepp (NWDA Subsidiary) Limited North West Business Link Limited
Net Assets Estuary Management Company Limited Rural Regeneration Cumbria Limited Norwepp (NWDA Subsidiary) Limited North West Business Link Limited
£000
2008 Agency Share £000
2007 Total £000
2007 Agency Share £000
95 1 2,691
95 1 2,691
110 1 -
110 1 -
2,787
2,787
111
111
4,760
4,760
-
-
4,760
4,760
-
-
2008 Total
2008 Agency Share £000
2007 Total £000
2007 Agency Share £000
-
-
Key Financial Results of Joint Ventures
£000 Renewables North West Limited Profit/(loss) for the year after taxation New East Manchester Limited Profit for the year after taxation Liverpool Land Development Company Limited Profit/(loss) for the year after taxation ReBlackpool Urban Regeneration Company Limited Profit/(loss) for the year after taxation Norwepp Limited Partnership (Loss) for the year after taxation Norwepp (General Partner) Limited Profit/(loss) for the year after taxation Total Profit/(Loss) of Joint Ventures for the year after taxation
(8)
(4)
259
86
80
27
-
-
-
-
(4)
(2)
-
-
(264)
(132)
-
(17)
Norwepp (General Partner) Limited did not trade during the year.
-
(52)
(490) -
(410)
(244) -
(217)
57
15. Interests in subsidiaries, associates and joint ventures (continued) Investments in Net Assets of Joint Ventures 2008 Total
2008 Agency Share £000
£000
2007 Agency Share £000
169 2,554 49 57 76,210 1
37 151 8,266 159,443 1
18 50 2,755 79,562 1
161,012
79,040
167,898
82,386
Gross Liabilities Renewables North West Limited New East Manchester Limited 342 Liverpool Land Development Company Limited 7,661 ReBlackpool Urban Regeneration Company Limited 99 Central Salford URC Limited 171 Norwepp Limited Partnership 150,547 Norwepp (General Partner) Limited -
114 2,554 49 57 75,197 -
22 245 8,266 154,961 -
11 81 2,755 77,327 -
158,820
77,971
163,494
80,174
165 2,026 1
55 1,013 1
15 (94) 4,482 1
7 (31) 2,237 1
2,192
1,069
4,404
2,212
£000 Gross Assets Renewables North West Limited New East Manchester Limited 507 Liverpool Land Development Company Limited 7,661 ReBlackpool Urban Regeneration Company Limited 99 Central Salford URC Limited 171 Norwepp Limited Partnership 152,573 Norwepp (General Partner) Limited 1
Net Assets Renewables North West Limited New East Manchester Limited Liverpool Land Development Company Limited ReBlackpool Urban Regeneration Company Limited Norwepp Limited Partnership Norwepp (General Partner) Limited
2007 Total
58
Notes (continued)
15. Interests in subsidiaries, associates and joint ventures (continued) Key Financial Results of Associates 2008 Total £000 Liverpool Vision Limited (Loss) for the year after taxation Furness West Cumbria New Vision Limited Profit for the year after taxation Brunswick Business Park Limited Profit/(loss) for the year after taxation Maryport Developments Limited Profit for the year after taxation Cumbria Vision Limited Profit for the year after taxation Daresbury Science and Innovation Campus Limited Profit for the year after taxation Hadrian’s Wall Heritage Limited Profit/(loss) for the year after taxation Total Profit/(Loss) of Associates for the year after taxation
2008 Agency Share £000
2007 Total £000
2007 Agency Share £000
(240)
(80)
(44)
20
4
70
14
-
-
-
-
140
28
18
4
5
1
-
-
15
2
1
-
3
1
35
7
(44)
80
10
(57)
Elevate East Lancashire Limited did not trade during the year.
(15)
59
15. Interests in subsidiaries, associates and joint ventures (continued) Investments in Net Assets of Associates 2008 Total
Gross Assets Liverpool Vision Limited Furness West Cumbria New Vision Limited Brunswick Business Park Limited Maryport Developments Limited Elevate East Lancashire Limited Cumbria Vision Limited Daresbury Science and Innovation Campus Limited Hadrian’s Wall Heritage Limited
Gross Liabilities Liverpool Vision Limited Furness West Cumbria New Vision Limited Brunswick Business Park Limited Maryport Developments Limited Elevate East Lancashire Limited Cumbria Vision Limited Daresbury Science and Innovation Campus Limited Hadrian’s Wall Heritage Limited
Net Assets Liverpool Vision Limited Furness West Cumbria New Vision Limited Brunswick Business Park Limited Maryport Developments Limited Elevate East Lancashire Limited Cumbria Vision Limited Daresbury Science and Innovation Campus Limited Hadrian’s Wall Heritage Limited
£000
2008 Agency Share £000
2007 Total £000
2007 Agency Share £000
276 1,091 3,952 296 364 379
92 218 806 37 61 95
459 835 124 3,845 387 370
153 167 30 784 64 74
6,358
1,309
6,020
1,272
172 944 4,146 272 347 340
57 189 846 34 58 85
115 650 69 4,368 386 335
38 130 17 891 64 67
6,221
1,269
5,923
1,207
104 147 (194) 24 17 39
35 29 (40) 3 3 10
344 185 55 (523) 1 35
137
40
97
During the year the Agency disposed of its investment in Brunswick Business Park Limited.
115 37 13 (107) 7 65
60
Notes (continued)
16. Long-Term Loans Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
As at 1 April Arising in year – NorwePP Limited Partnership (see Note 26) Amounts repaid in year
119,960
-
119,960
-
5,879 (12,000)
132,760 (12,800)
5,879 (12,000)
132,760 (12,800)
As at 31 March
113,839
119,960
113,839
119,960
10,000
10,000
10,000
10,000
103,839
109,960
103,839
109,960
Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
As at 1 April Additions in year Transfers from Investment Properties Transfers from Operating Assets Transfers to Operating Assets Transfers to NorwePP Limited Partnership (see Note 26) Disposals Amounts written down: European Aid-Funded Amounts written down: Grant In Aid-Funded Amounts written back: Grant In Aid-Funded Revaluations
88,034 6,119 -
94,581 21,541 5,181 933 (1,045)
88,034 6,119 -
94,581 21,541 5,181 933 (1,045)
(5,879) (8,302) (5,478) 5,241 4,649
(28,557) (775) (2,625) (15,109) 7,606 6,303
(5,879) (8,302) (5,478) 5,241 4,649
(28,557) (775) (2,625) (15,109) 7,606 6,303
As at 31 March
84,384
88,034
84,384
88,034
Repayable within 12 months - debtors Repayable after more than one year
17. Development Assets
61
18. Debtors
Trade debtors Other debtors Prepayments and accrued income Value Added Tax European Regional Development Fund Loan Note repayment due within 12 months Rural Loans
Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
7,918 10,430 2,036 20 1,511 10,000 33
11,422 8,738 3,063 888 4,112 10,000 50
6,864 10,430 1,427 1,143 10,000 33
11,400 8,726 3,051 869 4,112 10,000 50
31,948
38,273
29,897
38,208
2008 £000
2007 £000
2008 £000
2007 £000
9,020 1,214 46 21,668
10,122 4,598 23,553
8,213 1,158 46 20,480
10,122 4,598 23,488
31,948
38,273
29,897
38,208
Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
508 54,154 116,385 1,861 523 526
64,832 109,135 1,870 455
54,058 117,989 1,736 523 518
64,792 109,084 1,851 455
173,957
176,292
174,824
176,182
2008 £000
2007 £000
2008 £000
2007 £000
5,029 82,854 549 85,525
9,018 70,484 80 96,710
7,124 82,854 549 84,297
9,018 70,484 80 96,600
173,957
176,292
174,824
176,182
Intra-government balance analysis:
Balances Balances Balances Balances
with with with with
other central government bodies local authorities NHS trusts bodies external to government
19. Creditors: Amounts falling due within one year
Bank loans and overdrafts Trade creditors Accruals and deferred income Other creditors Value Added Tax Other Taxes and social security
Intra-government balance analysis:
Balances Balances Balances Balances
with with with with
other central government bodies local authorities NHS trusts bodies external to government
62
Notes (continued)
20. Creditors: Amounts falling due after more than one year
Deferred Income - Other Deferred Income - European Capital Grants
Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
5,330 16,935
559 20,342
5,330 16,935
559 20,342
22,265
20,901
22,265
20,901
Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
12,718 2,914 (6,310)
12,718 -
12,718 2,914 (6,310)
12,718 -
9,322
12,718
9,322
12,718
Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
21. Provisions for liabilities and charges
CPOs As at 1 April Arising during the year Released during the year As at 31 March
Dilapidations: As at 1 April Charge / (credit) to the Income & Expenditure account Arising during the year Released during the year As at 31 March Total
31 (22) (9)
978 (581) (366)
31 (22) (9)
978 (581) (366)
-
31
-
31
9,322
12,749
9,322
12,749
CPOs: Represent liabilities for compensation payments for land and buildings which have transferred to the Agency under Compulsory Purchase Orders. These should be settled within the next three years. The provision above has been provided by an independent chartered surveyor, but the final liability may be settled by arbitration. Dilapidations: Provision is made for the cost of repairs to buildings where, under the terms of the lease, the repairs are the responsibility of the tenant. The provision represents the amounts invoiced to tenants less expenditure incurred by the Agency for repairs.
63
22. General Reserve Group 2008 £000
Group 2007 £000
EU funded assets: At beginning of year Additions Disposals Amounts written off Revaluation Transfer from Grant In Aid Reserve
17,493 6,832 (2,446) (49) -
11,933 7,638 (2,624) 49 497
17,493 6,832 (2,446) (49) -
11,933 7,638 (2,624) 49 497
At end of year
21,830
17,493
21,830
17,493
English Partnerships funded assets: At beginning of year Additions Disposals Transfer from (to) Grant In Aid Reserve
2,780 1,180 (1,285) 932
3,027 268 (515)
2,780 1,180 (1,285) 932
3,027 268 (515)
3,607
2,780
3,607
2,780
-
4,760
-
-
(1,168)
-
-
2,276
-
-
5,868
-
At end of year
Activities in relation to subsidiaries and joint ventures: At beginning of year Surplus/Share of net assets of subsidiary 4,760 Movement in share of net assets of Associates and Joint Ventures (1,168) Transfer from revaluation reserve-net assets of subsidiaries and joint ventures (prior year) 2,276 At end of year
5,868
Agency 2008 £000
Agency 2007 £000
Pensions: At beginning of year Actuarial gain (loss) Transfer from Grant In Aid Reserve
(140) 6 (28)
(94) (26) (20)
(140) 6 (28)
(94) (26) (20)
At end of year
(162)
(140)
(162)
(140)
Total general reserve
31,143
20,133
31,143
20,133
64
Notes (continued)
23. Revaluation Reserve Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
At beginning of year Revaluations during the year Transfer to general reserve
63,261 4,668 (2,276)
33,764 29,497 -
63,261 4,668 (2,276)
33,764 29,497 -
At end of year
65,653
63,261
65,653
63,261
Group 2008 £000
Group 2007 £000
Agency 2008 £000
Agency 2007 £000
31,466
58,716
31,466
58,704
381,000
369,000
381,000
369,000
(386,749)
(396,288)
(392,842)
(396,276)
24. Grant in Aid Reserve
At beginning of year Grant in Aid received in year and applied to expenditure Net expenditure from Income and Expenditure Account Transfer to General Reserve – Activities in relation to Subsidiaries Transfer to General Reserve – English Partnerships funded assets Transfer to General Reserve – Pensions Transfer to General Reserve – EU funded assets At end of year
(4,760) (932) 28 20,052
515 20 (497) 31,466
(932) 28 18,720
515 20 (497) 31,466
25. Third Party Assets The Agency holds a third party asset of £74,383 relating to the Train to Gain programme. The funds are held on behalf of the Learning and Skills Council for subsequent distribution to North West Business Link.
65
26. Public Private Partnership On 8 December 2006 the Agency entered into a 10 year partnership with Ashtenne Industrial Fund Limited Partnership in relation to its property portfolio. All investment property assets and some of the development property assets were transferred to a 50:50 joint venture arrangement with Ashtenne Industrial Fund Limited for a consideration of £132,759,667. During this financial year further development property assets have been transferred for a consideration of £5,879,428.
Consideration details In return for transferring the properties the Agency received two loan notes to the value of the transfer payable over the duration of the partnership: 2008 2007 £ £ Loan Note A 34,159,774 32,689,917 Loan Note B 104,479,321 100,069,750 Loan Note B carries interest at 5% per annum and is repayable by instalments up to 31 March 2016. Loan Note A carries interest of 5% on the excess of the loan over the amount of the Loan Note of Ashtenne Industrial Fund (It is expected that Ashtenne will have matched the value of the loan by 31 March 2009). Loan Note A is only repayable at the end of the partnership. During the year the Agency received interest of £4,989,432 (2007 £2,026,817) on the Loan Notes. The management of the properties is carried out by Ashtenne Asset Management Limited. The Agency is entitled to receive a share in rental income and any uplift in value of the properties. During the year the Agency received a distribution of £1,020,079 (2007 Nil) for its share of profits. NWDA has first ranking security over the assets of the partnership to the value of any outstanding amount that has not been redeemed from Loan Note B. This security takes priority above that of any third party finance taken out by the partnership. Structure of the Joint Venture arrangement NorwePP Limited Partnership is effectively the joint venture vehicle. NWDA owns 49.95%, Ashtenne Industrial Fund Limited owns 49.95%, and 0.1% is owned by NorwePP (General Partner) Limited. NorwePP (General Partner) Limited is owned equally by NorwePP (NWDA Subsidiary) Limited and Ashtenne Industrial Fund Limited Partnership. In turn NorwePP (NWDA Subsidiary) Limited is 100% owned by NWDA and Ashtenne Industrial Fund Limited Partnership is 100% owned by Ashtenne Industrial Fund General Partner Limited .
66
Notes (continued)
27. Contingent liabilities The regeneration of Ancoats as an urban village is a major project for the Agency and is anticipated to make a vital contribution to the regeneration of East Manchester and the growth of the region. The project includes a programme of purchases under a Compulsory Purchase Order (CPO). Over the last four years the Agency has acquired nearly 200 plots of land and repackaged these into a smaller number of plots more suitable for redevelopment. The CPO process enables these acquisitions to take place without the price of each purchase needing to have been agreed with or paid to the former landowners. Under CPO legislation, the former owners submit claims to the Agency for the compensation they believe is due. A period of negotiation then follows. If a valuation cannot be agreed through negotiation, the final settlement is ultimately resolved through a reference to and ruling of The Lands Tribunal. Over half the amount of compensation due has already been paid. Provision of £4.888 million has been made in the accounts for the compensation outstanding on the Ancoats project. This is based on both the judgement exercised by the management of the Agency and an independent valuation and assessment by GVA Grimley, the appointed Consultant Surveyors. This provision covers the most likely cost of the compensation not yet agreed or paid. The Agency believes that the valuation provided is sufficient in terms of market conditions at the date of vesting and capable of being successfully defended at a Tribunal if this proves necessary. However there is a contingent liability of £1.4 million based upon the difference between the amounts of compensation which have been offered and provided for and the former land owners’ views of the compensation amounts they are entitled to.
28. Commitments (a) Operating leases As at 31 March 2007 the Agency had annual commitments under operating leases as follows: 2008 2007 Buildings Others Buildings £000 £000 £000 Leases expiring - within one year 54 - between one and five years 91 204 126 - over five years 931 931 1,022
258
1,057
Others £000 48 199 247
Rental costs of operating leases are charged to the Income & Expenditure Account on a straight line basis over the term of the lease. (b) Capital commitments Capital commitments at the end of the financial year, for which no provision has been made, are as follows:
Authorised by the Board and contracted
2008 £000
2007 £000
15,400
3,776
67
29. Financial instruments The Agency has no borrowings and relies primarily on departmental grants for its cash requirements and is therefore not exposed to liquidity risks. It has no material deposits and all material assets and liabilities are denominated in sterling, so it is not exposed to interest rate risk or currency risk. Transactions entered into which result in debtors due after more than one year have a low credit risk.
30. Post balance sheet events 1.
Developments in Associated companies a) Liverpool Vision Limited is currently in voluntary liquidation. A new company called Liverpool Vision Limited was incorporated on 30.4.2008. Its members are NWDA, English Partnerships and Liverpool City Council Liverpool Land Development Company Limited (LLDC) became a wholly owned subsidiary of Liverpool Vision Limited on 30.4.2008. It is planned that LLDC will become a dormant subsidiary during 2008/09 b) The NWDA has, subject to BERR consent, agreed to redeem the NWDA’s ordinary and preferential shares in Maryport Developments Ltd for £1 and to transfer the endowment to the new Maryport Harbour Authority. Assuming BERR approve the proposed transaction this will be undertaken during 2008/09.
2.
The Northwest Regional Development Agency’s financial statements are laid before the Houses of Parliament by the Secretary of State for The Department for Business, Enterprise & Regulatory Reform. FRS21 requires the Northwest Regional Development Agency to disclose the date on which the accounts are authorised for issue. This is the date on which the certified accounts are dispatched by the Agency to the Secretary of State for The Department for Business, Enterprise & Regulatory Reform. The authorised date for issue is 15 July 2008.
31. Related party transactions The Northwest Regional Development Agency is a Non-Departmental Public Body sponsored by The Department for Business, Enterprise & Regulatory Reform (BERR). BERR is regarded as a related party with which, during the year, Northwest Regional Development Agency has had a significant number of material transactions. In addition, the Agency has had various material transactions with other Government Departments and other central bodies. Most of these transactions have been with the Department for Communities and Local Government and English Partnerships (EP). Other Regional Development Agencies are also sponsored by the BERR and so are regarded as related parties. The Agency has had transactions with East of England Development Agency, East Midlands Development Agency, Advantage West Midlands, One North East, South East England Development Agency, South West of England Development Agency and Yorkshire Forward in the year. Board Members took no part in the discussions which concerned organisations that Board Members have connections with as reported in the Register of Members’ Interests. During the year none of the Board Members, key management staff or other related parties has undertaken any material transactions with the Northwest Regional Development Agency apart from those detailed on pages 68-72.
68
Notes (continued)
31. Related party transactions (continued) (a)
Board members
Name and position
Related Party
Position
Bryan Gray MBE, DL
Lancaster University
Pro Chancellor
Chairman
National Museum Liverpool
Trustee
Income to the Agency ÂŁ
Payments made to Organisations ÂŁ
Nature of transaction
18,996
6,637,258
Grant claims
-
9,167,837
Grant claims
-
621,500
Grant claims
Learning & Skills Council (National) Board Member1 Culture Northwest
17,719
299,254
Grant claims
Lake District National Park Authority Member
Board Member
-
31,103
Grant claims
Lowther Castle & Gardens Trust
-
44,514
Grant claims
Trustee (from 31/05/2007)
Professor Sir Martin Harris CBE, DL
University of Salford
Chancellor
-
1,101,007
Grant claims
Board Member
Manchester Knowledge Capital
Chairman
-
268,186
Grant claims
Anil Ruia OBE, JP, LLB The University of Manchester
Governor
2,494
10,856,463
Grant claims
Board Member (to 31/12/2007)
Sport England North West
Member
40,000
-
Cllr. Mike Storey CBE Board Member (to 31/12/2007)
Liverpool City Council Liverpool Conference Centre & Arena
Councillor
-
27,647,171
Grant claims
Director
-
3,350
Grant claims
Goods & services
Brenda Smith
The University of Manchester
Governor (to 01/05/2007)
-
26,556
Grant claims
Board Member
Manchester International Festival
Board Member
-
200,090
Grant claims
Liverpool Vision
Director1
-
726,076
Grant claims
Manchester Airport
Non-executive Chair
-
217,020
Grant claims
Notes
1 NWDA
Representation
69
31. Related party transactions (continued) (a)
Board members (continued)
Name and position
Related Party
Position
Income to the Agency ÂŁ
Payments made to Organisations ÂŁ
Nature of transaction
-
10,422
Grant claims
2,494
10,856,463
Grant claims
Dr Pauleen Lane CBE Trafford Metropolitan Borough Council
Elected Member
Board Member
University of Manchester
Employee
(to 31/12/2007)
English Partnerships
Deputy Chair
-
8,212
English Cities Fund
Director
-
355,174
Grant claims
St Helens Metropolitan Borough Council
Councillor
209,475
196,495
Grant claims
-
385,542
Grant claims
100,000
4,167,430
Grant claims
-
117,672
Grant claims
2,494
11,922,492
Grant claims
-
2,474,102
Grant claims
306,405
Grant claims
Councillor Marie Rimmer CBE
Goods & services
Board Member Prof. Maureen Williams Liverpool John Moores University
Visiting Professor of Governance
Board Member
The Mersey Partnership
Board Member1
Dave McCall
Migrant Workers North West
Chairman
Joe Dwek CBE
University of Manchester
Board Member
Board Member
Envirolink (North West) Ltd
Chairman (to 01/12/2007)
Prof. John Moverley OBE
Business Link Lancashire Limited
Director (to 30/04/2007)
Board Member
Board Member (to 31/12/2007)
Notes
1 NWDA
Representation
-
70
Notes (continued)
31. Related party transactions (continued) (a)
Board members (continued) Income to the Agency ÂŁ
Payments made to Organisations ÂŁ
8,841
-
18,996
6,637,258
Nature of transaction
Name and position
Related Party
Position
David Brockbank
Cumbria Vision
Chairman
Peter Hensman DL
Lancaster University
Member of Court
Board Member
Cumbria Rural Enterprise Agency
Vice Chairman
-
1,752,841
Grant claims
Tiss Ltd.
Shareholder
-
6,971
Grant claims
1,286,590
7,038,112
Grant claims
-
621,500
Grant claims
Goods & services
Board Member (to 31/12/2007)
Councillor John Merry Salford City Council Board Member
Leader
Learning & Skills Council (National) Board Member
Grant claims
MIDAS
Director
-
1,630,500
Grant claims
Marketing Manchester
Director
5,000
2,036,999
Grant claims
Vanda Murray OBE Board Member
TPMI Trading Ltd.
Non-executive Director (to 30/04/2007)
-
23,500
Grant claims
Robert Hough
New East Manchester
Chair
-
2,154,709
Grant claims
Board Member
The Mersey Partnership
Director (to 27/02/2008)
-
959,451
Grant claims
(from 01/01/2008)
University of Manchester
Governor
-
1,066,029
Grant claims
Notes
1 NWDA
Representation
71
31. Related party transactions (continued) (a)
Board members (continued) Income to the Agency ÂŁ
Payments made to Organisations ÂŁ
Nature of transaction
Name and position
Related Party
Position
Councillor Susan Williams
Manchester Enterprises
Board Member
-
1,004,789
Grant claims
Halton Borough Council
Leader
-
37,948
Grant claims
Natural England
Non-executive Board Member -
57,422
Grant claims
255,252
Grant claims
Board Member (from 01/01/2008) Councillor Tony McDermott CBE Board Member (from 01/01/2008) Peter Allen MBE Board Member (from 01/01/2008) John Brooks
Manchester Metropolitan University Chief Executive
Board Member (from 01/01/2008)
Notes
1 NWDA
Representation
-
72
Notes (continued)
31. Related party transactions (continued) (b)
Executive Management Board & Board Members
Name and position
Related Party
Position
Steven Broomhead
Warrington Chamber of Commerce1 Director Liverpool Land Development
Peter Mearns
Ian Haythornthwaite
Co1
-
19,502
Nature of transaction Grant Claims
Board Member
-
12,960,978
Grant Claims
Board Member
-
726,076
Grant Claims
University of Central Lancashire
Board Member
136,400
5,121,770
The Princes Trust1
Board Member
-
200,267
Manchester Enterprises1
Board Member
1,866,009
4,748,776
North West Business Link Limited
Board Member
-
13,786,586
Campaign for Learning
Patron
-
237
Business in the Community
Mentor
Culture Northwest1
Non-Exec Member
Tate Liverpool
National Football Museum
Norwepp (General Partner)
Limited1
Warrington Borough Council Liverpool
Notes
Payments made to Organisations ÂŁ
Liverpool Vision1
Cumbria Vision1
Bernice Law
Income to the Agency ÂŁ
Vision1
Grant Claims Goods & Services
-
141,750 299,254
Grant Claims
Trustee
-
105,521
Promotional Events
Director of Finance
-
21,500
Promotional Events
Board Member
16,863
-
Goods & Services
Board Member
-
317,350
Goods & Services
Husband employee (to 20/07/2007)
-
417,908
Grant Claims
Alternate Member
-
726,076
Grant Claims
-
12,960,978
Grant Claims
450
364,984
Grant Claims
Alternate Member
Liverpool Biennial
Board Member
Representation
Grant Claims Grant Claims, Goods & Services
17,719
Liverpool Land Development Company1
1 NWDA
Grant Claims, Goods & Services
Grant Claims