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Annual Report 2006


CONTENTS ANNUAL REPORT 3

Chairman’s Statement

5

Chief Executive’s Review

7

Operating Review

18

Governance

22

Environmental Policy

24

Directors Report

29

Remuneration Report

36

Statement of Internal Control

39

Certificate of the Comptroller and Auditor General

FINANCIAL STATEMENTS

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41

Income and Expenditure account

42

Statement of Total Recognised Gains and Losses

43

Balance Sheet

44

Cashflow Statement

45

Notes to the financial statements

73

Accounts direction


ANNUAL REPORT Chairman’s Statement Since the launch of the last Regional Economic Strategy (RES) in 2003, England’s Northwest has made significant progress. During this time, the Agency has done much to provide economic leadership and I am pleased to introduce this publication that outlines our most notable achievements in 2005/6. 2005/06 was a critical year for the NWDA as the Agency was one of the first Regional Development Agencies to be assessed by the National Audit Office (NAO). I am delighted that the NWDA was awarded the highest ranking possible, ‘Performing Strongly’. The assessment recognised key strengths of the Agency, including the very high quality and commitment of staff, strong partnership working, effective leadership ability, strong financial control and excellent record of achieving outputs. The assessment also included an improvement plan for the Agency that will be a focus for activity throughout 2006/7. The NAO also praised the review and development of the new Regional Economic Strategy (RES) which was one of the most significant events in 2005/6. The quality of debate throughout the consultation period was impressive and has led to a clearly prioritised strategy based on a strong understanding of the challenges before us and the actions that are needed to deliver a dynamic, international economy. By prioritising specific areas which will have the greatest impact on our economy, this is our most focused RES yet. All of the 122 actions listed are important, but for the first time, 45 of these are designated as transformational actions that the region must prioritise to drive growth. Transformational actions will dominate the Agency’s own priorities for 2006/7. The Agency has set itself a core set of strategic objectives to deliver its contribution to the RES including providing leadership on major policy issues, improving its operating structures and delivering transformational projects with partners. One such project is the creation of a Media Enterprise Zone linked to the BBC relocation. This is not just about the BBC moving to Greater Manchester, it offers real opportunities for all those involved in the creative industries across the region by significantly expanding this region as an internationally competitive media hub. In Business Support, the development of the future Business Link service in 2006/7 is critical to enable the region to compete in the global marketplace. Similarly, supporting major research concentrations and exploiting our world-class science base will ensure that the region is at the forefront of innovation and offer opportunities for businesses across the region.

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The provision of high quality Higher Education across the region is prioritised with the development of a University for Cumbria highlighted within the RES. The Northern Way will continue to be important as we seek to close the productivity gap between the North and the South. Blackpool’s continued regeneration is significant for the whole region with a critical decision on its regional casino bid expected in early 2007. The likely job impact of a positive decision will be felt well beyond Blackpool, together with opportunities across the region from increased numbers of visitors. It is important to note that the RES is not a stand-alone document. As a region we have been very successful in working together to align and integrate all of our strategies and this will be increasingly important in the coming months. The targets set out in the RES are extremely ambitious, which is why it is fundamental that the regional strategy is fully supported by everyone in the Northwest. The challenges we face will not be easy to overcome but through working together, we can ensure that we build on the Northwest’s strengths and seize the opportunities that will make the most difference to our economy. I look forward to working with all our partners in the coming months and years as we jointly implement this vision.

Bryan M Gray, Chairman

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Chief Executive’s Review In 2005-6 the Agency has focused on providing strategic leadership across the region through the development of the new Regional Economic Strategy (RES) - the region’s most focused and ambitious plan to date. For the first time, the RES gives priority to those areas which will have the greatest impact on our economy and are absolutely fundamental to success – the transformational actions. The Agency has subsequently focused its budget to ensure that programmes and projects are prioritised against the key objectives of the RES and the transformational actions in particular, and this has been acknowledged throughout the region as critical to achieving the ambitions within the RES. Throughout the RES process, we have worked closely with our regional partners. Co-ordination of activity at a sub-regional and local level is critical to delivering the RES and this year the Agency has established SubRegional Partnerships to lead the development of specific Action Plans to deliver RES activity in their areas. The Agency also underwent a rigorous examination of its organisational performance this year and I am delighted that we were awarded the top ranking of ‘Performing Strongly’. The National Audit Office (NAO) used an Independent Performance Assessment (IPA) to measure how effectively the NWDA is working to improve the region’s economy and found it is performing strongly with a ‘clear vision of what it wants to achieve as an organisation’. The assessment provided the Agency with a valuable opportunity to take stock of progress we have made and examine how we can improve in the future. This annual report includes a comprehensive update of the Agency’s activity and achievements over the year, but I would like to highlight the following:

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Investment of £50 million in Daresbury Science and Innovation Campus

Development of a new business plan for Business Link

Substantial investment in a new Centre for Tropical and Infectious Diseases at the Liverpool School of Tropical Medicine

Major support for the development of a Media Enterprise Zone in Greater Manchester

The development of plans for a University for Cumbria, including working with the Nuclear Decommissioning Authority to develop Nucleus

Building leadership capability in the North through the Northern Leadership Academy

Ensuring that the Regional Skills Partnership exercises maximum influence over the budgets of skills agencies in the region

Establishing Sub-Regional Partnerships to lead the development of sub-regional action plans and deliver the Regional Economic Strategy

The start on site of the Kings Dock Arena and Conference Centre on Liverpool’s waterfront

Working with Re Blackpool to progress an ambitious Masterplan for Blackpool’s regeneration


Significant progress on major strategic sites, including One Central Park and the Kingsway site in Greater Manchester

The development of the Regional Funding Allocations, a critical document which advised government on agreed regional transport, housing and economic development priorities

Key milestones on major infrastructure projects in Liverpool, including funding approval for a £19 million cruise liner facility

Major support for the region’s cultural and creative industries including investment in Liverpool ’08 as an official partner

Generating £16 million for the region through support for major sporting and leisure events, including the Tour of Britain Cycle Race and Salford Triathlon ITU World Cup

Pioneering research into the impacts of climate change on the visitor economy

The building blocks are already firmly in place to provide strategic delivery for the region. It is now important that we seek to ensure integration at a sub-regional level with all partners – national, regional and local – that have a remit to deliver an improved economy for the Northwest. By continuing to move in the same direction, I am confident that we can build on our strengths and seize the opportunities that lie ahead.

Steven Broomhead Chief Executive

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OPERATING REVIEW Key achievements against output indicators The following section provides an overview of the Agency’s performance during 2005/06 against the indicators determined by the DTI for assessing and comparing 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 a further analysis of progress made against the five priorities of the 2003-2006 Regional Economic Strategy - Business Development, Regeneration, Skills and Employment, Infrastructure, and Image. The Agency exceeded targets on nine of the ten headline and mandatory indicators with only the target on NVQ Level 2 being missed. In a number of cases, targets have been significantly exceeded due in part to the transition from the former Tier 3 output framework to the new Tasking Framework which required targets to be set for new output types without any previous baselines to work to.

SUMMARY OF PERFORMANCE Key achievements Target Range Number of jobs created or safeguarded

11,500

15,500

Achieved 15,738

This target has been exceeded and the jobs total surpasses performance in 2004/5. Out-turn is marginally outside the target range. Target Range Number of people assisted to get a job.

675

1,125

Achieved 9,131

Target has been significantly exceeded. This is a new output indicator for NWDA in 2005/06 and lack of previous experience in measuring this activity led to target being under-stated. Target Range Number of new businesses created/attracted to the region.

1,680

2,520

Achieved 2,770

Performance surpassed annual forecast with outputs coming mainly from Business Link Organisation interventions. A better than expected performance in the second half of the year led to the target range being marginally exceeded.

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Key achievements continued Target Range Number of businesses assisted to improve their performance.

9,360

Achieved

14,040

20,936

The target has been exceeded due to the inclusion of Business Link intensive assists in the reported figures - these were not included in the target due to a lack of certainty at the time that they complied with the Tasking Framework definition. Target Range Number of businesses within the region assisted to engage in new collaborations with the UK knowledge base.

410

Achieved 690

1,809

The target range has been significantly exceeded. This is a new output indicator for NWDA and lack of previous experience led to target being under-stated. Major contributions have come from HEIF2, Cluster Development, and the University of Manchester & UMIST Careers Service. Target Range Public and private regeneration infrastructure investment levered.

i) Total(ÂŁm) ii) Private Leverage

270 38%

Achieved

450 62%

378 61%

Out-turn figures for overall investment and the proportion of private sector investment are within the target range. Target Range Hectares of Brownfield Land reclaimed and/or redeveloped

310

Achieved 410

327

Out-turn within the target range. NWDA remains the highest contributor to the Government’s national brownfield land target with a 30% contribution. Target Range Number of people assisted in their skills development.

13,600

20,400

Achieved 23,112

Out-turn is outside the target range primarily as a result of parts of the target being based on the previous Tier 3 definition (1 week of learning) rather than the new Tasking definition (1 day of learning). This meant that the target was under-stated.

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Key achievements continued Target Range Number of adults in the workforce achieving at least a full Level 2 qualifications or equivalent.

1,500

Achieved 2,500

929

This target has not been achieved. NWDA has previously predicted that the target would not be met as it was based, in large part, on a misunderstanding of the definition associated with the indicator. Further, Level 2 is not a skills investment priority for NWDA (or other RDAs) – the RDAs consider that mainstream LSC funding is focused on Level 2 and the much smaller level of RDA funding should be channeled into the higher level skills required to improve regional economic performance. In its lead role for skills, NWDA is in discussion with Government about the relevance of this output indicator to the RDAs. Target Range Number of adults gaining basic skills.

900

Achieved 1,500

3,353

Target range has been significantly exceeded. This is a new output indicator for NWDA and lack of previous experience in measuring this activity led to target being under-stated. Selective Financial Investment (‘SFI’)

During the year, 128 applications for SFI were received and 112 offers accepted to the total value of £21.6m. These projects will lever £140.5m capital investment, and are forecast to create 2,780 jobs and safeguard 1,167 jobs, at an average cost per job of £5,488.

Inward Investment

2005/06 was another highly successful year for the region with 112 projects recorded within the region. The NWDA were directly involved in securing 40 of the 112 inward investment successes, creating/safeguarding 2,722 jobs for the region.

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KEY ACTIVITIES 2005/06 Business Advancing scientific growth Recognising science as a key economic driver, the Agency has continued to invest in the region’s scientific research base and industry-university collaborations. This year the NWDA launched the £15 million North West Science Fund, to build on the region’s growing reputation as a leader for science and innovation. Bringing together the academic expertise of Northwest universities with the commercial focus of industry, the fund provides a major resource to speed up the transfer of scientific discoveries into world-class commercial products. Among the initiatives being pioneered is the world’s first centre to undertake Zoonosis research in Liverpool. The development of this multi-disciplinary centre of excellence, which will research infections transmissible between animals and humans, will form a national focus in this area for government, industry and the public. In Manchester, the fund is supporting the UK Centre for Tissue Regeneration, helping to develop small calibre artificial arteries, skin repair products, cartilage regeneration and nerve repair techniques, while additional investment to develop a state-of-the-art stem cell research centre will place the region at the cutting edge of advances in this field. A collaborative venture to help position the Northwest as a leading region for laser engineering is also being developed, while the establishment of a regional centre of excellence in composite materials for use in the automobile and aerospace industries will lever in over ten times the initial investment for the project. Lastly, the Science Fund is also investing in the development of the Fourth Generation Light Source (4GLS) prototype, a state-of-the-art suite of accelerator-based light sources. If the prototype is successful, it will place Daresbury Laboratory in pole position to secure the government investment needed to enable the full 4GLS facility to be built, a potential £230 million investment. The Agency’s doubling of its investment in Daresbury Science and Innovation Campus to £50.3 million has reaffirmed the site’s reputation as a scientific centre of excellence. A significant part of this new investment is for the Cockcroft Institute, the UK’s National Centre for Accelerator Science. In Liverpool, the Liverpool Science Park was officially opened in January and is now home to 10 high-technology companies.

Enabling innovation and enterprise The Agency has undertaken a major review of business support in the region to ensure that high quality and relevant support is available to new and growing businesses. A key milestone was the NWDA Board’s approval of the Business Plan for the future Business Link Service in the region. This is aligned with the Regional Economic Strategy (RES) and will take effect from April 2007. Industry continued to sharpen its competitive edge through the Manufacturing Advisory Service (MAS), delivered by the Manufacturing Institute. Northwest companies now achieve the highest regional output of all the English regions (£19.5 billion), the highest employment (423,000) and the highest investment (£2 billion). Recognising the importance of all groups to the regional economy, the Agency has provided support to help improve the enterprise contribution of women, black and ethnic minority-owned businesses and social enterprises. The development of sub-regional action plans is providing a template for specialist support, including skills training, business advice and mentoring.

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Enabling innovation and enterprise continued The Agency continues to stimulate the establishment and development of high-growth companies. During the year, £5.8 million investment was received from business angels registered with the Agency’s TEChINVEST service, together with the region’s seed and venture capital funds, levering an additional £53.8 million from the private sector. Offering sector-specific advice and support to key growth sectors, including biotechnology, creative industries and energy, continues to be a key goal for the Agency. Through the Regional Business Advisor programme, now in its second phase, support was offered to over 100 SMEs, helping them to increase their turnover to £323 million.

Investment Success Foreign-owned companies gave the Northwest economy a major boost in 2004-05* by investing in over 92 business and industrial projects, almost 30 more than the previous year, and creating and safeguarding 7,966 jobs, one of the highest figures of any region in the UK. Figures released by UK Trade and Investment (UKTI) show that the NWDA played a key role in 55 of these projects, and, with partners, helped to create 3,421 jobs and safeguarded a further 2,528. Solid evidence of the increasing confidence in the region as an international business location, JPMorgan INVEST established a new pension business in Liverpool with Agency assistance, creating 450 local jobs. The Agency and MIDAS, Manchester’s inward investment agency, are working together on a 3-year strategic partnership to build upon the city’s position as one of Europe’s most sought-after business locations. Collaborative successes in this area include the State Bank of India’s decision to locate to Manchester and the Bank of New York’s continued investment in the region, which has led to the creation of 800 new jobs. Working in partnership, the Agency has also supported a number of investment projects through the Selective Finance for Investment in England (SFI) scheme. Projects included a grant for Liberata, one of the UK’s leading providers of outsourced business processes, to establish a new business centre in Barrow-in-Furness, creating 200 jobs for the town. The Agency’s intervention is placing the region at the forefront of biopharmaceutical progress. A £9 million NWDA investment to fund a new Centre for Tropical and Infectious Diseases at the Liverpool School of Tropical Medicine was matched by the Merseyside Objective One programme, and levered in a further £29 million from the Gates’ Foundation to fund a fast-track mosquito control programme. Further investment in the sector was made by Bionow, which has funded new equipment for the University of Manchester’s Wolfson Molecular Imaging Centre (WMIC), set to become an international centre of excellence in the advancement of treatments for cancer and brain disorders. With the region’s creative industries contributing in excess of £3 billion to the regional economy, the Agency continues to help the Northwest develop a prosperous creative sector. Taking a lead in supporting the relocation of several BBC departments to the Northwest, the NWDA is working closely with all partners to ensure the region gets the maximum economic benefit from the associated development of a Media Enterprise Zone. Reinforcing the important area of energy research and development is the Joule Centre, an alliance between the Agency and Northwest universities to initiate and coordinate research into strategic energy issues from demand-side management to low carbon technologies. * Latest figures available.

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Skills & Education As the lead Regional Development Agency (RDA) for employment, skills and higher education, the NWDA is leading a number of programmes to build a skilled workforce relevant to the needs of business and industry. The Agency is playing a key role in the government’s National Skills Strategy through the development of the Regional Skills Partnership (RSP), which brings together the collaborative resources of the Learning and Skills Council (LSC), JobCentre Plus, Higher Education and Sector Skills Councils to better meet the needs of employers in the Northwest. The strengthening of the LSC’s presence in the region will enable the RSP to ensure that LSC resources meet the priorities of the Regional Economic Strategy (RES).

Capital investment Developing the region’s higher education infrastructure is fundamental to improving access to high quality learning and teaching. With access to higher education a particular issue in Cumbria, the Agency is working with partners to establish a University for Cumbria, which will widen higher education opportunities within Cumbria and build a portfolio of courses to attract students and postgraduates from other parts of the UK and overseas. Linked to this, the Agency is working closely with the Nuclear Decommissioning Authority in West Cumbria on two projects which will help to establish the area as a world leader in nuclear decommissioning. Developments underway include Nucleus, a world-class training and business support centre to address the skills issues facing the nuclear sector, and a National Nuclear Skills Academy, of which Nucleus will form one of the first delivery arms. Facilitating the growth of existing education institutions also forms an important part of the Agency’s vision to boost our skills base. Construction work is currently underway on the development of a new £27 million campus at Warrington Collegiate, which will include a business school, technology centre and construction skills centre. In Salford, the development of an Innovation Forum Centre based at Salford Innovation Park, will bolster Manchester’s reputation for innovation, creativity and knowledge. Delivering the skills required by priority sectors is essential to support their growth. Manchester’s New Technology Institute at One Central Park, led by MANCAT with Agency support, has been designed as a onestop-shop offering adult training and employment opportunities in the technology sector. In Merseyside, the needs of the construction sector are being addressed through the Agency-funded Construction for Merseyside initiative, a unique programme which will help to create a large and highlyskilled workforce for local construction businesses.

Showcasing skills The Agency has continued to invest in career development for individuals, based on a clear understanding of business needs. A number of interactive events were held throughout the year to engage young people and adults in exploring the career opportunities available in the region. Careers practitioners working with 14-19 year olds were given an insight into working with employers from key sectors at a regional conference held by Careers Northwest, the online careers service which was developed and funded by the NWDA. In November, Manchester hosted SkillCity. The event attracted over 30,000 young people from over 2,000 schools from across the region, who were able to try their hand at a wide range of careers and listen to expert advice. Promoting an enterprising culture, particularly among the region’s young people, plays an important role in nurturing future talent for the Northwest. Two events, Business Enterprise Exchange and The Next Big Thing, were held as part of National Enterprise Week and were aimed at providing young people with the confidence, skills and inspiration to turn business ideas into reality

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The Northern Way Following the launch of the Northern Way Growth Strategy in 2004-05, two key projects to boost leadership and tackle basic skills shortages in the Northwest have been developed. The Northern Leadership Academy is a £5 million initiative to strengthen leadership across the North of England. The Academy, led by a consortium of Lancaster University Management School, Leeds University Business School and the University of Liverpool Management School, aims to build a more entrepreneurial North by developing new ways of building leadership capability in both existing leaders and those with leadership potential. The vision of the Northern Way to improve employability and reduce worklessness through pioneering initiatives is also helping to deliver the basic skills required by employers. Knowsley Works is an innovative Northern Way project to enable 3,000 longterm Incapacity Benefit claimants to move back into employment.

People & Jobs Regenerating our towns and cities The Agency’s work to ensure that the Regional Economic Strategy (RES) is supported at a sub-regional and local level has continued throughout the year with the establishment of Sub-Regional Partnerships (SRPs). In addition to leading on the delivery of specific RES actions, each SRP has responsibility for the development of 3-year action plans, which will be updated annually. Work has also continued on the Northern Way Growth Strategy, the collaborative initiative to drive economic and physical renewal across the North of England. With eight city regions across the North being identified as engines for growth, the Agency is now working closely with partners in Manchester, Liverpool and Central Lancashire to prepare their city regional development programmes. These plans will be key in setting out major challenges for each city region and providing an overview of their economic development potential. The regeneration of the region’s towns and cities remains a priority in driving forward economic growth and the Agency continues to work with Urban Regeneration Companies in developing and implementing masterplans for the transformation of their areas. New East Manchester’s £6 million restoration of the historic Gorton Monastery will be an important catalyst for the regeneration of the area, attracting visitors and future investment, while a three-year programme of work to enhance the Medlock Valley is creating a high quality leisure facility for East Manchester. In Liverpool, changes to the city’s skyline continued with construction teams on site at Kings Waterfront. The £146 million mixed-use development, co-ordinated by Liverpool Vision, will incorporate a multi-purpose arena and conference centre, exhibition space and public piazza. Delivered in time for the city’s Capital of Culture ’08 celebrations, the development is set to become an international destination for business and leisure. Plans to secure the future of the Port of Barrow have also progressed this year with the first stage of the town’s £60 million masterplan, led by West Lakes Renaissance, now in place. Following the acquisition of land required to take forward the redevelopment of the Port area, plans are underway to create an employment park, housing development and marina and watersports complex. The development is expected to lever in an additional £100 million of private sector investment. In Lancashire, the Agency is working closely with Re Blackpool to implement the town’s masterplan and is supporting Blackpool’s bid to secure the regional casino pilot. Outside the main urban areas, other programmes are underway to aid regeneration of local areas.

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In Cheshire, Agency support has enabled the completion of the central section of Chester’s Old Port promenade, improving access to the town centre, opening up a previously closed walkway for pedestrians and cyclists and improving the city’s tourism offer. The Agency is also helping to ensure good design is embedded in projects across the Northwest. RENEW Northwest, the regional champion for regeneration excellence, has hailed five regeneration projects across the Northwest as best practice partners, rewarding them with Exemplar Learning status.

Supporting rural growth The Agency continues to work hard to diversify the rural economy and provide new economic and social opportunities for rural businesses and communities. The Agency is spearheading a number of initiatives to help the region’s market towns regain a pivotal role in economic and social life. Benefiting from the Agency’s Market Town Initiative is Neston, Cheshire, whose £1 million investment programme has a focus on encouraging business start-ups and the development of a resource centre to address the skills needs of local residents and employers. In Lancashire, the Agency is driving forward the development of Community Resource Centres as part of the Rural Pathfinder project, a Lancashire Economic Partnership-led scheme which will also examine the transport needs of local communities and encourage rural enterprise. Improving the competitiveness of primary agriculture also remains a key objective. In Cumbria, HRH The Prince of Wales launched Junction 38, a facility enabling farmers to tap into the growing market for organic, locally produced red meat. Supported by the Agency via Rural Regeneration Cumbria, the processing facility will enable profits to be passed back to farmers, helping to improve their productivity.

Infrastructure Creating 21st century business locations The Agency has made progress in priming the region’s portfolio of strategic sites for investment, working closely with the private sector on a number of developments across the region. In Greater Manchester, the £350 million, 170-hectare Kingsway site is underway. The NWDA is investing £31 million into the Park’s development which, when completed, will attract large scale inward investment and growing local businesses, contributing upwards of 7,000 new jobs for Greater Manchester and the Northwest. The first premises will be ready for occupation in early 2007. The £18.5 million One Central Park in Manchester has opened its doors to begin delivering research, development and education facilities on the UK’s first urban ICT business park. The development, led by the Agency, aims to capitalise on Manchester’s knowledge industry and is expected to create more than 100,000 new jobs in East Manchester over the next 10-15 years. In Chorley, planning approval has been granted for the Royal Ordnance Factory site where a £20 million investment by LEX Auto Logistics is expected to generate over 2,000 jobs and attract businesses to the area. Following a strategic review of its property assets, the Agency is establishing a joint venture to have responsibility for the management of, and investment into, its property portfolio. The creation of a 50/50 Public Private Partnership will enable the Agency to get the best value out of its property assets.

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Encouraging sustainable development Reclamation of brownfield land is a key priority in increasing the value of the Northwest’s natural environment, a sector worth in excess of £4 billion. Through Newlands, the £23 million joint venture between the NWDA and the Forestry Commission, sites at Moston Vale (North Manchester) and Bidston Moss (Wirral) are now being transformed into community woodlands, boosting economic conditions and providing recreational facilities for residents and visitors. Supporting careers within the environmental and regeneration sectors remains key in ensuring that the Northwest has the skills base to meet future employment needs. A new programme, Sustainability Mentoring NW, part funded by the Agency, brings together experienced professionals in these sectors with university students across the region, in a mentoring scheme that is helping to raise the profile of the sustainable industries and contribute to the development and retention of graduate talent.

Setting regional priorities The NWDA continues to use its strategic influence to advise government on regional priorities. Working in partnership with the North West Regional Assembly and Government Office for the North West, the Agency developed the Regional Funding Allocations, a key document which sets out agreed housing, transport and economic development priorities for the region. One major priority, the Mersey Gateway, has since gained government support.

Developing transport solutions Liverpool’s waterfront was provided with a welcome boost this year, with the approval of a £19 million cruise liner facility - £10 million of which will be invested by the Agency. The size of the new berth will mean that some of the world’s most famous liners will be able to drop anchor in Liverpool and more than 25 cruises are expected to call at the city each year by 2009, carrying an extra 250,000 visitors. With visitor accessibility playing an important part in Liverpool’s European Capital of Culture celebrations in 2008, a number of schemes are being brought forward to reduce congestion, enhance the local environment and improve safety for both motorists and pedestrians. The largest, the Edge Lane Project, is a comprehensive regeneration scheme that will create an improved gateway to Liverpool. Led by Liverpool Land Development Company and funded by a Partnership including the NWDA, the programme will also see the development of mixed residential, leisure and commercial development and is expected to lever in £120 million of private sector investment. Other improvements also being undertaken in Liverpool include the City Centre Movement Strategy, a programme supported by the NWDA and the European Regional Development Fund, which aims to create a sustainable transport system and improve accessibility in and around the city centre. Two major schemes have already been completed as part of the programme.

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Quality of Life Strategic Tourism Leadership With tourism a £3 billion industry for England’s Northwest, it is essential to prepare for future challenges that will face the visitor economy. In partnership with Defra, the Agency has spearheaded research into the longterm effects of climate change on tourism in the region. The first major report of its kind, the study makes a number of recommendations about how to counter the physical effects of climate change and help maintain a quality visitor experience. Reinforcing the importance of excellence in customer service was a theme echoed across a number of events and initiatives throughout the year, including the second regional tourism conference at Rheged, Cumbria, and the Welcome to Excellence initiative, the national customer service training programme delivered to tourism businesses in the Northwest by Lancashire and Blackpool Tourist Board. The Agency has also supported a number of new and exciting visitor attractions that broaden the region’s tourism offer. A spectacular installation on Crosby beach by Angel of the North sculptor Antony Gormley was unveiled to critical acclaim. ‘Another Place’, which consists of 100 cast-iron lifesize figures spread out along 3 kilometres of the foreshore, has already attracted 300,000 extra visitors to Crosby, generating additional revenue for the local economy. Established visitor attractions have also received support in order to deliver new facilities, offer better visitor management and increase visitor numbers. Following a £3.8 million investment and over 10 years of restoration work, Staircase House in Stockport began a new chapter in its history as one of the Northwest’s oldest heritage attractions. A living interactive merchant’s house, the project received NWDA support and is now the cornerstone of Stockport’s £500 million town centre regeneration plan. In partnership with Regional Development Agency One NorthEast, the NWDA has also established a new organisation to maximise the economic benefit of Hadrian’s Wall, which will ensure its ongoing conservation and make the international heritage site one of the world’s must-see attractions. Visitor marketing campaigns have been launched to highlight the region’s cultural and leisure assets. Successes include The Taste District, 50 Fabulous Walks and Gardens of England’s Northwest, which highlighted the region’s many parks and gardens and generated an additional £10 million of tourism business. Internationally, the NWDA is working with its Northern counterparts on promoting the North as a great visitor destination as part of the Northern Way Growth Strategy.

Improving the cultural product The Agency’s strong support for Liverpool’s successful bid for Capital of Culture in 2008 was reflected in it becoming an official ‘08 partner, investing £2 million to assist the marketing of the city’s cultural programme. In Manchester, the Agency is also showing support for the city’s creative talent by sponsoring the Manchester International Festival in 2007, the world’s first international festival of original new work.

Supporting major events Major sporting and leisure events have acted as a catalyst for regional efforts to project a positive image of the Northwest and increase visitor spend. Events supported by the Agency in the past year, including the Tour of Britain Cycle Race and Salford Triathlon ITU World Cup, generated £16 million for the region and 13.5 hours of national and international television coverage. Capitalising on this world-class reputation for hosting major sporting events, the region has also been successful in attracting the 2007 European Hockey Championships and the World Squash Championship in 2008. Both events will be staged in Manchester.

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The region is working hard to ensure it plays a full part in the London 2012 Olympic and Paralympic Games, which could generate huge benefits for sport and regeneration across the UK. Working alongside London’s Organising Committee, the NWDA, Sport England and regional partners are developing a comprehensive benefit plan for the region and in January, the Agency hosted a special conference welcoming Lord Coe, Chair of the London Organising Committee, to the region. Attracting business tourism is becoming increasingly important in today’s visitor economy. The Northwest Conference Bidding Unit, established by the Agency to capitalise on the growing conference market, secured 33 conferences in 2005/06, including those to be held by the Labour Party in 2006 and the National Union of Teachers in 2008.

Capitalising on creative industries Showcasing the region’s television and film industry became a major focus of activity during the year, with several new initiatives to capitalise on the Northwest’s creative sector. In June, the Agency and North West Vision highlighted England’s Northwest as the home of some of the brightest creative talent to over 250 television and film industry professionals at a showcase event held at Manchester Square, London. The NWDA also confirmed a further £1 million investment for the Regional Attraction Fund, an initiative which aims to boost independent film and television production throughout England’s Northwest. A new film office for the region was established in Cumbria. Co-ordinated by North West Vision, the office is enabling the county to promote itself as a location for film and television production. With filming for Miss Potter, the Beatrix Potter biopic, now underway, the office is already helping to raise Cumbria’s profile amongst filmmakers and generate jobs for the region.

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Governance The Board Board Members, including their main occupation and interests are listed below. The full register of Board Members interests is available from the Agency’s Headquarters in Warrington. Details of transactions with such entities in the financial year are disclosed in note 30. In December 2005 Robert Johnston was replaced by Vanda Murray OBE who took up her post on 1 April 2006.

Bryan Gray MBE DL (appointed April 2002) Bryan Gray is Chairman of the Northwest Regional Development Agency. He is also: • • • • • • • • •

Chairman of Baxi Technologies Vice President of Micropower, promoting new energy technologies. Pro Chancellor of the University of Lancaster A member of the National Learning & Skills Council A member of Liverpool Capital of Culture Board A Trustee of National Museums Liverpool Director of Culture Northwest Chairman of Westmorland Ltd, operators of Tebay Motorway Services A member of the Lake District National Park Authority

Professor Sir Martin Harris, CBE, DL (appointed December 2001) Deputy Chairman of NWDA. Formerly Vice Chancellor of the University of Manchester, he is now Chancellor of the University of Salford and Deputy Chairman of USS Limited. He is also Chair of Manchester Knowledge Capital and Director for the Office of Fair Access.

David Brockbank (appointed December 2004) Chairman of Cumbria Vision and property developer with a number of projects in Cumbria. He was appointed by the Secretary of State to the Lake District National Park Authority from 1988 to 1997.

Joseph Dwek CBE (appointed December 2003) Executive Chairman and Chief Executive of Bodycote International Plc from 1972 until 1998, when he retired. Formerly Chairman of the Mersey Basin Campaign, Healthy Waterways Trust, and Council Member of ENCAMS. Currently: • • •

A Director of City Invoice Finance Ltd, Jerome Group Plc, Penmarric Plc, Opal Property Group Ltd and Mercury Recycling Ltd Chairman and Chief Executive of Worthington Group Plc Chairman of Enworks and Envirolink

He is also a member of the Board of the DTI Environmental Innovation Advisory Group.

Peter Hensman (appointed December 2004) A chartered accountant and engineer who has spent most of his career in the general and financial management of manufacturing companies, Peter is now Executive Director of a small group of companies involved in tourism, leisure and property in Cumbria. He is a non-executive Director of Cumbria Rural Enterprise Agency and Furness Building Society. He chairs Cumbria Community Foundation and chaired Kendal Brewery Arts Centre from 2001-2005.

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Robert Johnston (appointed December 2002) From 1996-2005 he was Managing Director of the Visual Link, a Cumbrian based world-class creative technology SME specialising in ICT, media and communications, serving a range of blue-chip customers. In 2001 he created Enabling Educational Excellence (e), a company producing award-winning e-learning teacher training materials and creating bespoke change-management distance learning packages. Currently Chief Executive of Cumbria Chamber of Commerce; Chief Executive of Cumbria Digital Development Network; and member of Cumbria Learning and Skills Council.

Dr Pauleen Lane CBE (appointed December 2001) Mayor and an Elected Member of Trafford MBC. A civil engineer who has worked in engineering practice, Dr Lane currently lectures in Geotechnics and Computing at the University of Manchester. Dr Lane is also Vice Chair of English Partnerships and an Audit Commissioner. She is also a Director of English Cities Fund and Priority Sites Ltd on behalf of English Partnerships.

Dave McCall (appointed December 2003) Regional Secretary of the Transport and General Workers Union since 1996 and Chair of the North West TUC since 2002. He has been a full time trade union official since 1980 with experience of public appointments on the North West Industrial Development Board. He served on the governing body of Manchester Metropolitan University. Currently chairperson of the North West Migrant Workers Institute and also serves on the Cheshire and Warrington Learning and Skills Council.

Cllr John Merry (appointed December 2004) Leader (Labour) Salford City Council. John 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.

Professor John Moverley OBE (appointed December 2004) Chief Executive and Principal of Myerscough College until November 2005. He is currently Chief Executive of the Royal Agricultural Society for England. He is a Board Member of the Lancashire Economic Partnership and the Lancashire Learning and Skills Council. A Director of East Lancashire Strategic Partnership and Lancashire Business Link.

Cllr Marie Rimmer CBE (appointed December 2002) Elected Member (Labour) of St Helens Council (Council Leader until May 2006). Also Chair of the Local Strategic Partnership; a Director of St Helens Chamber and The World of Glass; and Board Member of the Mersey Partnership. Previously: • •

Chair of the former Association of Metropolitan Authorities Housing Committee and served on the European Committee of the Regions Social Affairs Committee. Chair of the North West 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.

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Anil Ruia OBE JP (appointed December 2001) Director of Wrengate Limited. The company imports, distributes and converts textiles and also has a controlling stake in Warren Tea Limited, India, engaged in the business of growing, manufacture and sale of tea. A magistrate, Mr Ruia also holds a number of positions which contribute to the economic regeneration of the Northwest including Chairman of the North West International Trade Forum, Member of Manchester: Knowledge Capital and non-executive Director Granada Television Ltd.

Cllr Mike Storey CBE (appointed December 2001) Elected Member (Liberal Democrats) of Liverpool City Council, Cllr Mike Storey is its longest serving member. He is the Headteacher of Plantation CP School in Halewood Merseyside. Mike has been a member of the LGA Economic Regeneration Committee from 1996, previous to that he was a Member of AMA Economic Regeneration Committee. He is also a Board Member for The Mersey Partnership, Liverpool Vision and Liverpool Land Development Company from 1 April 2003. Previously Board Member of Speke Garston Development Company.

Brenda Smith (appointed December 2001) Group Managing Director Europe, Ascent Media Group. Brenda was Managing Director, Granada Television and Managing Director, Studios Granada Plc until May 2004, when she became Deputy Chair, Granada Television Ltd. Brenda is also a Board Member of Liverpool Vision and has chaired the Regional Marketing Forum since December 2002. Member of Tourism Forum, Non-executive Director of Manchester Airport Group, Non-executive Director of AFM Lighting Ltd and Chair of Skillset London Forum.

Professor Maureen Williams (appointed December 2002) Professor Williams is the Chief Executive and founder of the Merseyside Development Foundation. She is a Member of the Learning and Skills Council of Greater Merseyside and a Director of The Mersey Partnership. She is an Honorary Fellow and Visiting Professor of Sociology (Governance) at Liverpool John Moores University. She is also a Senior Expert/Consultant with the Council of Europe, Company Secretary to St Helens District Women’s Aid and Deputy Chair of the Lee Kai Hung Foundation. She is the author of various books on management training, training trainers and women in the voluntary sector.

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 2006, convened on 7 occasions and the Audit Committee which convened on 4 occasions. In addition, there are seven sub-committees to the main Board, which met regularly throughout the year: • Enterprise, Innovation & Skills

• Marketing, Communications & Tourism

• Infrastructure

• Environment

• Rural

• Health and Social Inclusion

• Urban

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Annual General Meeting The Agency’s Annual General Meeting was held on 16 September 2005 at the Manchester International Conference Centre, with a keynote address from Terry Waite CBE. The conference outlined the key activities made by the Agency and its partners in the preceding year. The Chief Executive and Chairman presented on their future plans for the region. The 2006 Annual General Meeting will be held on 4 October 2006.

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

Its 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 has continued to implement its Equality and Diversity Strategy which sets out three main dimensions under which the Agency will fulfil its obligations: as an employer, a programme deliverer and as a leader through partnerships and facilitation.

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 publish information 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 51 requests for information under the Act between 1 April 2005 and 31 March 2006.

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Environmental Policy Statement Our aim is to contribute towards the delivery of sustainable economic development in the region and ensure that environmental objectives are integrated into relevant business objectives. We are committed to the continual improvement of our environmental performance and we will conduct our own activities and operations to reflect best environmental practice. Specifically, in the short term we will: •

Review our activities, operations and procedures to identify environmental aspects and prioritise actions to address them;

Implement an environmental management system appropriate to the location, scale and nature of our activities to demonstrate our commitment to the Greening Government Initiative and the Government’s Sustainable Development strategy;

Establish an environmental management Steering Group to drive forward commitments made in our environmental policy and provide regular (minimum of biannual) progress reports to the Board;

Take measures to increase staff awareness of environmental issues and individual environmental responsibilities and ensure that environmental management is included within our staff induction and training programmes;

Develop and implement a Green Travel Plan for business and commuter travel for all of our offices and actively encourage staff to think about and where possible change their travel behaviour;

Establish recycling schemes for all appropriate waste streams in each of our offices.

In the longer term we will: •

Reduce energy and resource consumption within the Agency by promoting effective and efficient reduction methods consistent with best practice;

Set and achieve measurable targets against agreed baselines across the Agency for key performance criteria such as energy, transport, emissions, waste, water and environmental incidents. This includes setting appropriate environmental indicators and targets to measure our impact on the environment of the region e.g. CO2;

Meet and, where possible, adopt best practice regarding all relevant UK, European and International environmental legislative and regulatory requirements and identify staff responsible for developing a register of environmental legislation of relevance to the Agency and monitoring environmental legislative compliance;

Where appropriate, use the most resource-efficient technologies and media for communicating and maintaining records of documentation;

Purchase, wherever possible, environmentally-preferable goods and services and influence our suppliers and contractors to ensure that goods and services procured support our environmental procurement policy;

Ensure that all projects and programmes we fund are appraised for their environmental and sustainable development impact, e.g. through procuring sustainable building materials;

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Environmental Policy Statement continued

page 23

•

Develop a communications policy to share information and best practice with others to help contribute to a better understanding of environmental and sustainable development issues;

•

Publish in a limited paper form, and make available on our web-site, an environmental report with information on our environmental performance and progress against corporate targets;

•

Ensure good management practice by repeating an Environmental Audit of the organisation every two years, by a third party and review and revise this policy statement accordingly.


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 of Trade and Industry (DTI). 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, reproduced on page 73, issued by the Secretary of State, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;

Make judgements 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 of Trade and Industry 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 Government Accounting. 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 National Audit Office audit report on the Agency’s website and in other electronic forms.

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Directors Report continued 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 the financial year.

Results for the year and review of activities There was no surplus or deficit for the year after taxation (2005: £nil). The Agency’s total expenditure for the year amounted to £419.5m (2005: £416.0m), of which £382.9m (2005: £380.2m) was spent on delivering programme activities. The full results for the year are contained in the Agency’s financial statements set out below. The Agency continued to work with Yorkshire Forward and ONE North East to develop and establish the Northern Way growth corridor, stretching from Liverpool to Hull and northwards to Newcastle. The aim is to boost the productivity of the whole of the North of England, reduce regional disparities, and tackle social and economic exclusion by linking areas of opportunity and need. During the year the Agency has been developing the concept of Sub-Regional Partnerships (SRPs), and this will continue into the forthcoming year. The SRPs will be delivered through funded Action Plans that will include initiatives to strengthen delivery capacity.

Significant changes in fixed assets On 1 April 2005 Investment Properties with a value of £100.5m were held by the Agency. During the year there were additions at a cost of £1.4m and disposals from this portfolio with an aggregate book value of £8.2m. At 31 March 2006 the Investment Property portfolio was re-valued, resulting in a revaluation surplus of £1.3m. This surplus was applied to the Government Grant Reserve.

Future developments The 2005 Spending Review allocated £1.5bn for NWDA investment in the region over three years from 2006-8. For 2005-6 the Agency’s Board has agreed an investment plan of £420m for projects spanning the range of the Agency’s responsibilities. This has involved a thorough prioritisation of planned and committed expenditure as the available resources are not sufficient to fund every project seeking support. During 2006/07 the responsibility for the delivery of current and future EU co-financed socio-economic funding in the North West of England will transfer from the Department for Environment Food and Rural Affairs to the NWDA. The Agency will implement its efficiency plan and enhanced performance management systems to support the delivery and project management of key priorities and programmes. Learning and development of all employees will continue to be valued.

page 25


Directors Report continued 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 1 April 2002) Professor Sir Martin Harris CBE DL, Deputy Chairman (appointed December 2001) David Brockbank (appointed December 2004) Joseph Dwek CBE (appointed December 2003) Peter Hensman (appointed December 2004) Robert Johnston (appointed December 2002)* Dr Pauleen Lane CBE (appointed December 2001) Dave McCall (appointed December 2003) Cllr John Merry (appointed December 2004) Professor John Moverley OBE (appointed December 2004) Cllr Marie Rimmer CBE (appointed December 2002) Anil Ruia OBE (appointed December 2001) Brenda Smith (appointed December 2001) Cllr Mike Storey CBE (appointed December 2001) Dr Maureen Williams (appointed December 2002) * Retired December 2005

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Directors Report continued Board Members Brief biographies for the Board Members are shown in the Annual Report 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 one day per week. The Agency maintains a Register of Board Members’ Interests, which is available on request by contacting the Executive Director of Operations at the Agency’s offices at Renaissance House, Warrington. Members declare their interests to the Board in any transactions involving relevant organisations.

Employment of disabled persons 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.

Provision of information to and consultation with employees 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 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.

Better payment practice code The Agency is committed to the Better Payment Practice Code and aims to pay 95% of all undisputed invoices either within 30 days or the terms agreed with the supplier. In 2005-6 the Agency did not achieve this target paying 89% (2005: 83%) of invoices within 30 days. The Agency’s ability to pay suppliers within the target timescale has improved on the previous year, and the Agency will seek to continue this improvement in 2006-7 with the aim of achieving the prompt payment target in the forthcoming year.

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: Audit Services

£73,000

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.

page 27


Directors Report continued 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.

Statement on the Agency’s policy for conserving energy, reducing waste and minimizing the release of greenhouse gases. In 2005/6, the NWDA Board formed an Environmental Sub-committee to advise the Board on the implementation of the Regional Economic Strategy as it pertains to the environment. An Environment Action Plan has been developed to assist the Sub-committee in monitoring progress including energy conservation, waste reduction and minimising greenhouse gas emissions. The Action Plan addresses Internal Environmental Management, Mainstreaming into NWDA Policies and Processes, Influencing the Region and Single Programme expenditure on Projects and Programmes and incorporates action from the Memorandum of Understanding with the Environment Agency. In the last year, the NWDA has defined its significant environmental aspects. As a result it has: developed a Green Travel Plan to reduce the emissions from its business vehicles; developed a sustainable development communications strategy; implemented staff training on Environmental Management and has commenced work on adoption of sustainable procurement practices. Through its single programme expenditure, the Agency has supported Constructing Excellence and RENEW (the region’s centre of excellence for regeneration) to influence improved construction practices. The Agency has also developed a Business Resource Efficiency and Waste (BREW) programme with key partners and appointed a co-ordinator for the programme. In addition, the Agency continues to support programmes aimed at developing the environmental technologies sector including transforming waste into products. The Agency continues to fund business support programmes to assist regional businesses in reducing their greenhouse gas emissions, adapting to climate change, reducing their energy consumption and support them in achieving excellence in corporate responsibility. The Northwest Regional Development Agency’s Environmental Policy is laid out on page 22. The Policy will be reviewed and updated as part of the Agency’s Environmental Audit.

Steven Broomhead Chief Executive Officer

page 28


Remuneration Report This report for the year ended 31 March 2006 is produced by the Board on the recommendation of the Remuneration Committee and deals with the remuneration of the Chair, Chief Executive, Board members and Executive Directors who have influence over the decision of the agency as a whole.

Remuneration Committee The remuneration of the Board is set by the Department of Trade and Industry. The remuneration figure for the Board is reviewed every year by DTI in line with the recommendations of the Senior Salaries Review Board. Five members of the Board sit on the Remuneration Committee. The Remuneration committee met seven 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. The committee was chaired by Bryan Gray and the other members were Dave McCall, Anil Kumar Ruia, Martin Harris and Brenda Smith. In reaching its recommendations, the Remuneration 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 Performance pay for the Chief Executive is determined by the Chairman on the recommendation of the Remuneration & 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 2005/06 the targets related to the financial objectives for the Agency; the performance targets set by Government; the objectives for the Agency’s lead role with DfES/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 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 and Deputy Chairman 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) on behalf of the Agency. Please see the emoluments table for details of the terms of appointment of the board members. Board members appointments are made in accordance with the Commission of Public Appointments Code. For Board Members, there is no provision in place for the early termination of appointment. The following sections provide details of the remuneration and pension interests of Board members, Chief Executive and senior managers.

page 29


Emoluments of Board members The emoluments of Board Members can be analysed as follows: Salary

Pension

Total 2006

Total 2005

Name

Period of Appointment

Bryan Gray (Chairman)

April 2002 – Dec 2008

£76,875

£8,849

£85,724

£88,615

Professor Sir Martin Harris

Dec 2001 – Dec 2007

£16,305

-

£16,305

£15,861

David Brockbank

Dec 2004 – Dec 2007

£8,153

-

£8,153

£2,410

Joe Dwek

Dec 2003 – Dec 2009

£8,153

-

£8,153

£7,931

Peter Hensman

Dec 2004 – Dec 2007

£8,153

-

£8,153

£2,410

Robert Johnston*

Dec 2002– Dec 2005

£6,115

-

£6,115

£7,931

Dr Pauleen Lane

Dec 2001 – Dec 2007

£8,153

-

£8,153

£7,931

Dave McCall

Dec 2003 – Dec 2009

£8,153

-

£8,153

£7,931

John Merry

Dec 2004 – Dec 2007

£8,153

-

£8,153

£2,410

Professor John Moverley

Dec 2004 – Dec 2007

£8,153

-

£8,153

£2,410

Marie Rimmer

Dec 2002 – Dec 2008

£8,153

-

£8,153

£7,931

Anil Kumar Ruia

Dec 2001 – Dec 2007

£8,153

-

£8,153

£7,931

Brenda Smith

Dec 2001 – Dec 2007

£8,153

-

£8,153

£7,931

Mike Storey

Dec 2001 – Dec 2007

£8,153

-

£8,153

£7,931

Dr Maureen Williams

Dec 2002– Dec 2008

£8,153

-

£8,153

£7,931

* Retired December 2005

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Emoluments of Chief Executive and senior managers 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 Principal Civil Service Pension Scheme (PCSPS). The terms of this scheme come under the terms of the Civil Service Compensation Scheme. The emoluments of the Chief Executive and senior managers can be analysed as follows: Name

Salary

Bonus

Benefits

Pension

Total 2006

Steve Broomhead, CEO

£125,830

£22,649

£10,248

£19,245

£177,972

£171,603

Bernice Law, Executive Director of Operations

£103,438

£10,116

£1,194

£25,288

£140,036

£119,862

Ian Haythornthwaite, Executive Director of Finance and Corporate Resources

£98,816

£4,021

£3,156

£24,242

£130,235

£56,347

Helen France, Executive Director of Development & Partnerships

£95,224

£7,156

£4,572

£23,435

£130,387

£117,987

Mark Hughes, Executive Director of Enterprise and Innovation

£97,767

0

£3,696

£24,327

£125,790

£3,664

£7,264

0

£269

£1,787

£9,320

0

Peter White, Executive Director of Infrastructure (Appointed 6 March 2006)

Benefits in kind The Board have no benefits in kind. Benefits in kind for the Senior Managers consist of lease cars provided by the Agency.

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Total 2005


Pension benefits Pension benefits of Board members With the approval of DTI, a 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 is 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 DTI. No other Board members are eligible for pension contributions, performance related pay or any other taxable benefit as a result of employment with the Agency.

Brian Gray, Chairman

Real increase in pension

Real increase in lump sum

Pension at 31 March 2006

Lump sum at 31 March 2006

CETV at 31 March 2005

CETV at 31 March 2006

£000

£000

£000

£000

£000

£000

0 – 2.5

0 – 2.5

2.5 – 5

0 – 2.5

34

50

Real increase in CETV as funded by employer £000 15

Pension benefits of Chief Executive and senior managers Steven Broomhead, Bernice Law, Ian Haythornthwaite, Helen France, Mark Hughes and Peter White are all members of PCSPS. Helen France and Peter White are members of the Classic Scheme. The Chief Executive and Senior Management have given their consent to show their pension benefit details, as follows: Real Real Pension Lump CETV CETV Employee Real increase increase at sum at at at contriincrease in in lump 31 March 31 March 31 March 31 March butions in CETV as pension sum 2006 2006 2005 2006 and funded by transfers employer £000 £000 £000 £000 £000 £000 in £000 £000 Steven Broomhead

0-2.5

N/A

45-50

N/A

549

740

2.5-5

30

Bernice Law

2.5-5

N/A

45-50

N/A

557

770

2.5-5

44

37.5-40

N/A

35-40

N/A

7

538 345-347.5

525

Helen France

0-2.5

2.5-5

30-35

95-100

391

530

0-2.5

18

Mark Hughes

0-2.5

N/A

0-5

N/A

0

19

2.5-5

16

0-2.5

2.5-5

5-10

15-20

90

135

0-2.5

23

Ian Haythornthwaite*

Peter White (Appointed 6/03/06)

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Pension benefits continued * During the year Mr Haythornthwaite has transferred into the Principal Civil Service Premium Pension Scheme service of 22 years and 17 days from previous employment. Columns 5 and 6 of the previous table show the member’s cash equivalent transfer value (CETV) accrued at the beginning and the end of the reporting period. Column 8 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.

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.

Non Cash remuneration During the year there has been no element of non cash remuneration.

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.

Civil Service Pensions Pension benefits are provided through the CSP arrangements. From 1 October 2002, civil servants may be in one of three statutory based "final salary" defined benefit schemes (classic, premium, and classic plus). The Schemes are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, and classic plus are increased annually in line with changes in the Retail Prices Index. New entrants after 1 October 2002 may choose between membership of premium or joining a good quality "money purchase" stakeholder arrangement with a significant employer contribution (partnership pension account).

page 33


Employee contributions are set at the rate of 1.5% of pensionable earnings for classic and 3.5% for premium and classic plus. Benefits in classic 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. For premium, 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 give up (commute) some of their pension to provide a lump sum). Classic plus is essentially a variation of premium, but with benefits in respect of service before 1 October 2002 calculated broadly as per classic.

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 per cent of pensionable earnings. On death, pensions are payable to the surviving spouse at a rate of half 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. 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. Pensions payable under classic, premium, and classic plus are increased in line with the Retail Prices Index.

Partnership Pension Scheme The partnership pension account is a stakeholder pension arrangement. 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). Further details about the CSP arrangements can be found at the website www.civilservice-pensions.gov.uk.

page 34


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 2003. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservicepensions.gov.uk). For 2005/06, employers' contributions of £2,157,583 were payable to the PCSPS (2004/05 £1,447,718) at one of four rates in the range 16.2 to 24.6 per cent of pensionable pay, based on salary bands. The Scheme Actuary reviews employer contributions every four years following a full scheme valuation. From 2006/07, the salary bands will be revised and the rates will be in a range between 17.1 and 26.5 per cent. The contribution rates reflect benefits as they accrue, not the costs as they are actually incurred, and reflect past experience of the scheme.

Partnership Pension Scheme Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers' contributions of £20,656 (2004/05 Nil) were paid to one or more of a panel of three appointed stakeholder pension providers. Employer contributions are age-related and range from 3 to 12.5 per cent of pensionable pay. Employers also match employee contributions up to 3 per cent of pensionable pay.

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 NWRDA is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 2005 and more details can be found in the separate scheme statement of the English Partnerships Pension Scheme. For 2005/06, normal employer contributions of £88,602 were payable to the English Partnerships Pension Scheme (2004/05 £105,450) at the rate of 14.5 per cent of pensionable pay (2004/05 14.5%). It has been agreed that contributions will be reviewed on an annual basis although the actuary conducts a full revaluation of the fund every 3 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.

Bryan M Gray Chairman

page 35

Steven Broomhead Chief Executive


Statement of Internal Control Scope of Responsibility As Accounting Officer, I have responsibility for maintaining a sound system of internal control within the 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.

The Purpose of the System of Internal Control The system of internal control is designed to manage 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 the principal risks to the achievement of the Agency’s policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically. This process has been in place for the year ended 31 March 2006 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 Executive Management Board, led by the Chief Executive, is responsible for the operation of the Agency’s corporate risk management process. A Risk Management and Assurance Group was established to support the Executive Management Board and Audit Committee. The corporate risk management process has been refreshed and reviewed by 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 approach to the different stages of the risk management process including risk identification, analysis, evaluation and control. (b) Directorate Risk Registers Risk registers are maintained by each of the Agency’s Directorates. The most significant risks identified by the Directorates are incorporated into the Agency’s overall risk register.

page 36


Statement of Internal Control continued The Risk and Control Framework continued (c) Review of Risk Registers The Directorates update the risk registers on a quarterly basis as part of the business planning process. Where controls are not considered to be working effectively, further action is put in place. The Executive Team review the Agency risk register on a regular basis and make changes as appropriate.

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. The Executive Management Board meets fortnightly to make key decisions, agree actions and specific initiatives and to review financial and operational performance. 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.

Project Management System The Agency embarked on a comprehensive review of its system for the management of projects during the year. The Systems and Process Improvement Programme is designed to ensure the guidance offered by the DTI under the Single Programme is comprehensively adopted throughout the whole Agency. Following discussion of the new project management system, and testing on key pilot projects, the new system has gone live in 2006 with support from a comprehensive staff training programme.

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.

page 37


Statement of Internal Control Continued Review of Effectiveness 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, the Head of Risk and the Executive Management Team within NWDA 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. The Board and the Audit Committee have advised me on the implications of the result of my review of the effectiveness of the system of internal control, and a plan to address weaknesses and ensure continuous improvement of the system is in place.

Steven Broomhead Accounting officer

8 July 2006

page 38


THE CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT AND THE NORTHWEST REGIONAL DEVELOPMENT AGENCY I have audited the financial statements of the Northwest Regional Development Agency for the year ended 31 March 2006 under the Regional Development Agencies Act 1998. These comprise the Income and Expenditure Account, the Balance Sheet, the Cashflow Statement and Statement of Total Recognised Gains and Losses and the related notes. These financial statements have been prepared under the accounting policies set out within them.

Respective responsibilities of the Northwest Regional Development Agency, Chief Executive/Accounting Officer and Auditor The Northwest Regional Development Agency and Chief Executive/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 the directions made there-under by the Secretary of State and for ensuring the regularity of financial transactions. These responsibilities are set out in the Statement of Agency and Accounting Officer Responsibilities. My responsibility is to audit the financial statements 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 the directions made there-under by the Secretary of State. 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. I also report to you if, in my opinion, the Annual Report is not consistent with the financial statements, if the Northwest Regional Development 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 relevant authorities regarding remuneration and other transactions is not disclosed. I review whether the statement on page 36 reflects the Northwest Regional Development Agency’s compliance with HM Treasury’s guidance on the Statement on Internal Control, and I report if it does not. I am not required to consider whether the Accounting Officer’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Northwest Regional Development 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 section, the Environmental Policy and the Directors’ Report and only the unaudited parts 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.

page 39


Basis of audit opinion 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 Northwest Regional Development Agency and Chief Executive/Accounting Officer in the preparation of the financial statements, and of whether the accounting policies are most appropriate to the Northwest Regional Development 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 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 In my opinion: •

the financial statements give a true and fair view, in accordance with the Regional Development Agencies Act 1998 and directions made there-under by the Secretary of State, of the state of the Northwest Regional Development Agency’s affairs as at 31 March 2006 and of its financial results 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

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.

I have no observations to make on these financial statements. John Bourn

Comptroller and Auditor General National Audit Office 157-197 Buckingham Palace Road Victoria London SWIW 9SP 12/06/06

page 40


FINANCIAL STATEMENTS Income & Expenditure account For the year ended 31 March 2006 Note

2006 (ÂŁ000)

2005 (ÂŁ000)

2

335,127

323,457

Income Grant-in-Aid Small Business Service funding

1,106

19,490

European funding Coalfield and other government grants

6,294 5,496

18,120 4,999

28,406

14,721

11,810

12,269

4,157

9,669

17,716

7,474

Transfer from government grant reserve

22

Rents and maintenance charges Claw-back of grant and contributions Proceeds from disposal of Assets Other income

5,082

3,770

415,194

413,969

329,851

325,364

Expenditure Grants paid for programme expenditure Salaries and wages

6

17,830

16,348

Other administrative costs Non-grant programme expenditure

4

16,734 27,026

14,846 32,001

620

1,659

Non-grant coalfield expenditure Book value of Assets sold

15,910

5,856

Asset valuation write-down

12,147

22,002

(469)

(2,971)

(340)

(310)

195

1,255

419,504

416,050

(4,310)

(2,081)

1,573

2,080

Asset valuation write-back Release of Environmental Provisions

20

Bad debts and movements in provision for bad and doubtful debts Operating Deficit Interest receivable

5

Notional cost of capital

9

(Deficit) for the year on ordinary activities Taxation

10

(Deficit) for the year after Tax Reversal of notional cost of capital (Deficit) / Surplus for the year carried forward

9

(6,838)

(6,092)

(9,575)

(6,093)

2,737

1

(6,838)

(6,092)

6,838

6,092

-

-

All activities are from continuing operations. The notes on pages 45-72 form part of these accounts.

page 41


Statement of total recognised gains and losses for the year ended 31 March 2006 Note Surplus for year carried forward Revaluation on Investment and Development Assets

2006 (ÂŁ000)

2005 (ÂŁ000)

-

-

4,530

26,366

Grant receivable not released to the Income and Expenditure Account

30,932

41,821

Total recognised gains

35,462

68,187

page 42


Balance sheet as at 31 March 2006 Note

2006 (ÂŁ000)

2005 (ÂŁ000)

Fixed Assets Intangible Operating Assets

11

482

145

Tangible Operating Assets

12

2,619

3,691

Investment Properties

13

95,018

100,515

Investments

14

24,046

14,949

122,165

119,300

Current Assets Development Assets

16

94,581

90,670

Debtors

17

117,852

72,434

Cash at bank and in hand

25

Creditors: Amounts falling due within one year

18

Net Current Assets Creditors: Amounts falling due after more than one year

19

Provisions For Liabilities And Charges

20

Total Assets Less Total Liabilities

19,370

26,749

231,803

189,853

(127,725)

(80,813)

104,078

109,040

(20,275)

(15,692)

(978)

(3,306)

204,990

209,342

Reserves Government Grant Reserve

22

204,553

204,287

European Funding Reserve

23

9,526

14,144

Income and Expenditure Reserve

24

(9,089)

(9,089)

204,990

209,342

These financial statements were approved by the board on 13th July 2006.

Bryan M Gray Chairman

page 43

Steven Broomhead Chief Executive


Cash flow statement for the year ended 31 March 2006 2006 (£000)

2005 (£000)

(37,796)

(47,450)

1,573

2,080

(11)

385

(11,065)

(9,141)

8,988

4,710

(38,311)

(49,416)

Financing for Assets

30,932

41,821

Increase in Cash

(7,379)

(7,595)

Net liquid funds as at 1 April 2005

26,749

34,344

19,370

26,749

Note Net Cash Outflow From Operating Activities

Returns On Investments And Servicing Of Finance Interest Received

Taxation UK Corporation Tax paid

Capital Expenditure And Financial Investment Purchase of Fixed Assets Proceeds on disposal of Fixed Assets Net Cash Outflow Before Financing

Financing

Net liquid funds as at 31 March 2006

25

Reconciliation of operating deficit to net cash outflow from operating activities 2006 (£000)

2005 (£000)

(4,310)

(2,081)

Increase in development assets

(19,867)

(32,030)

Increase in debtors

(46,786)

(42,062)

46,819

37,409

1,461

1,430

(340)

(310)

Transfer from government grant reserve

(28,406)

(14,721)

Transfer from European funding reserve

(805)

(11,935)

(4,618)

(3,328)

Note Operating Deficit

Increase in creditors Depreciation and amortization Environmental liability provision increase

European advance funding for BIS Loss / (Profit) on disposal of assets Asset valuation write-down Asset valuation write-back Increase in other provisions Net cash outflow from operating activities

6,922

1,147

11,374

22,002

-

(2,971)

760

-

(37,796)

(47,450)

page 44


NOTES TO THE FINANCIAL STATEMENTS 1.

Accounting policies

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 Trade and Industry, 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 under the modified historical cost basis as explained in the sub-paragraphs below and in accordance with applicable Accounting Standards. Compliance with SSAP 19 "Accounting for Investment Properties" requires departure from the requirements of the Companies Act 1985 relating to depreciation and an explanation of the departure is given below.

Basis of Consolidation The Agency holds a number of investments in other subsidiary and associate undertakings. No consolidated financial statements are presented on the grounds that there is no material difference between the Agency’s own financial statements and those prepared on a consolidated basis.

Intangible Operating Assets Intangible Operating Assets consisting of software licences are valued at amortised historic cost, which is not materially different from amortised replacement cost.

Tangible Operating Assets Tangible fixed assets are valued at depreciated historic cost, which is not materially different from depreciated replacement cost.

Investment Properties The portfolio of industrial and commercial investment properties held at any one time is treated in such a way that surpluses and deficits on revaluation of industrial and commercial properties are netted off. Any overall write-down of these properties to open market value, and subsequent adjustments thereto, are accounted for annually and separately identified in the Income & Expenditure Account. Any overall surplus on revaluation of these properties to open market value, and subsequent adjustments thereto, are credited to the government grant reserve after eliminating the overall accumulated unrealised deficit, as originally charged, by revaluation adjustment, to the Income and Expenditure Account. Valuations are carried out in accordance with best practice as contained in the Statement of Asset Valuation Practice and Guidance Notes (4th Edition) published by the Royal Institute of Chartered Surveyors. A valuation for the whole portfolio was carried out as at 31st December 2005, which was undertaken by King Sturge, International Property Consultants.

page 45


Investment Properties continued In accordance with SSAP 19, no depreciation is provided in respect of investment properties. This departure from the requirement of the Companies Act 1985 for all properties to be depreciated is, in the opinion of the Board, necessary for the Financial Statements to give a true and fair view in accordance with applicable accounting standards as properties are included in the Financial Statements at their open market value. Depreciation is only one of the many factors reflected in the annual valuation of the properties and the amount attributed to this factor by the valuers cannot reasonably be separately quantified. Acquisitions and disposals of land and buildings are accounted for on the date of legal completion.

Investments Investments are valued at market value unless this cannot readily be obtained, where an alternative method of valuation is used. Movements arising on the revaluation of investments are reflected in the government revaluation reserve, except for impairments and reductions in value below historical cost, which are reported in the income and expenditure account.

Development Assets Development assets, consisting of land and buildings, 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 government grant reserve. Acquisitions and disposals of Development Assets are accounted for on the date of legal completion.

Depreciation and amortisation Depreciation and amortisation is provided to write off the replacement cost of tangible fixed assets over their anticipated useful lives on a straight line basis at the following annual rates: Owned property

50 years

Leasehold buildings with less than 25 years to run

Period of lease

Office furniture, fittings and equipment

5 years

Computer equipment

3 years

Software licences

3 years

Investments and Long Term Loans Investments and loans are shown 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 the DTI is obtained for any write-off in excess of £250,000. Partnership workspace schemes, the Agency’s investment with partners, mainly local authorities, to provide rural workspace has been disclosed in the Balance Sheet at a valuation based on the present value of estimated future rental income. Expenditure on these projects is written off in the year of spend.

page 46


NOTES CONTINUED 1.

Accounting policies continued

Pension Costs Certain of the employees of the Agency participate in the Principal Civil Service Pension Scheme (PCSPS) and the English Partnerships Pension Scheme (EPPS). The PCSPS and EPPS are defined benefit schemes. The Agency recognises the expected cost of providing pensions on a systematic and rational basis over the period during which it benefits from employee's services by payment to the scheme of amounts calculated on an accruing basis. Liability for payment of future benefits is a charge on the scheme

Government Grants The Agency’s activities are funded primarily by Grant-in-Aid provided by the Department of Trade and Industry for specified types of expenditure. Government Grants receivable of a revenue nature are credited to the Income & Expenditure Account in the year to which they relate. Government Grants in respect of capital expenditure are credited to the Government Grant Reserve (GGR) 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.

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 is 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 Deferred European Funding Reserve (DEFR) 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.

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 FRS 19 a deferred tax asset is only recognised if there is sufficient evidence that it is likely to be recoverable at the balance sheet date.

Foreign Currency Transactions Transactions in foreign currencies are recorded in sterling at the rates prevailing at the date of transaction. Resulting exchange gains and losses are taken to the Income & Expenditure Account.

Leases Operating lease rentals are charged to the Income & Expenditure Account over the period of the lease. The Agency does not hold any finance leases.

page 47


2.

Analysis of total grant utilised

In 2005-6, the Agency was funded by Grant-in-Aid from the Department of Trade and Industry

Grant-in-Aid received from DTI Grant-in-Aid allocation for Regional Aggregation Board Grants received Transfer from Government Grant Reserve Opening net grant creditor / (debtor) Closing net grant debtor / (creditor) Total grant receivable

2006 (£000)

2005 (£000)

305,000

315,000

-

650

12,893

46,526

1,368

6,093

(23,660)

4,022

83,059

23,661

378,660

395,952

Total relevant expenditure

421,734

431,215

Less non-grant income

(43,074)

(35,263)

Total grant utilised

378,660

395,952

-

650

Regional Aggregation Board loan Total grant applied to: - Operational Asset additions - Investment Asset additions - Development Asset additions - Investment additions Grant in Aid credited to Income & Expenditure Account Other Income & Expenditure Account Total grant utilised

736

703

1,379

1,662

19,867

32,030

8,950

6,776

335,127

323,457

12,601

30,674

378,660

395,952

2006 (£000)

2005 (£000)

Analysis of net closing debtor/(creditor):

Grant in Aid Coalfields

95,889

41,500

1,279

1,076

European Union

(5,141)

(5,104)

BIS

(9,526)

(14,144)

SBS

558

333

-

-

83,059

23,661

Tax and interest

page 48


NOTES CONTINUED 3.

Analysis of income and expenditure by key driver Grant applied to capital Total Total income expenditure additions recorded recorded recorded in GGR & in in European I&E I&E Reserve Account Account 2006 2006 2006 £000 £000 £000

Business Development

99,237

99,237

22,669

116,066

116,066

26,888

220,467

220,467

3,104

213,949

213,949

4,943

Skills

15,007

15,007

-

18,654

18,654

-

Infrastructure

35,073

35,073

1,388

26,136

26,136

8,873

Investing in Image & Environment

11,815

11,815

-

7,312

7,312

-

Administration

32,251

36,561

736

30,368

32,449

707

1,344

1,344

3,035

1,484

1,484

410

415,194

419,504

30,932

413,969

416,050

41,821

Regeneration

Coalfields

page 49

Total Total income expenditure recorded recorded in in I&E I&E Account Account 2005 2005 £000 £000

Grant applied to capital additions recorded in GGR & European Reserve 2005 £000


4.

Other administration costs

Professional costs

2006 (£000)

2005 (£000)

2,535

1,388

Marketing and PR

2,787

2,360

Estate Management

2,950

2,676

469

340

Office costs

2,216

2,169

Operating lease rentals

1,436

1,251

Other staff costs

726

923

IT and communication

965

907

Non-recoverable VAT

Travel & Subsistence

805

1,095

Depreciation and Amortisation

1,461

1,430

Contributions to Joint Ventures

311

239

External Auditors’ remuneration

73

68

16,734

14,846

5.

Interest receivable 2006 (£000)

Corporation Tax Interest Bank deposit Rural loan interest

2005 (£000)

23

20

1,549

2,056

1

4

1,573

2,080

page 50


NOTES CONTINUED 6.

Salaries and wages 2006 (£000)

2005 (£000)

197

194

Board Members Board members salaries Pension costs

9

14

16

15

222

223

Social security costs

Staff Salaries and wages inc. overtime

12,555

12,052

Pension costs

3,059

1,596

Social security costs

1,151

1,037

16,765

14,685

Temporary staff Recruitment agency staff

340

610

Seconded staff salary costs

503

830

843

1,440

17,830

16,348

Total Salaries and wages

7.

Staff numbers

The average number of staff employed by the Agency during the year (including all seconded staff) was 378 (2005: 376). The figures do not include recruitment agency staff. 2006 Senior Management

2006 Staff

2006 Seconded In Staff

2006 Total

2005 Total

Chief Executive’s Office

1

20

-

21

18

Operations

1

88

1

90

81

Enterprise and Innovation

1

93

6

100

112

Development and Partnerships

1

90

-

91

88

Corporate Resources

1

75

-

76

77

5

366

7

378

376

Department

page 51


8. Pension arrangements 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. With the approval of DTI, a 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 DTI. No other Board members are eligible for pension contributions, performance related pay or any other taxable benefit as a result of employment with the Agency. The 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 North West Development Agency. A full actuarial valuation was carried out as at 31/03/06 by a qualified independent actuary. The major assumptions of the actuary were:

Financial Assumptions

31/03/2006

The inflation assumptions

01/04/2005

31/03/2005

2.5%

2.5%

2.5%

4%

4%

4%

The rate of increase for pensions in payment and deferred pensions

2.5%

2.5%

2.5%

The rate used to discount scheme liabilitites

5.4%

5.4%

6.1%

The rate of increase in salaries

The effect of accrual during year The current service cost (net of employee contributions)

£000’s 16

Any past service costs

0

Gains and losses on any settlements and curtailments

0

The interest cost

4

page 52


NOTES CONTINUED 8. Pension arrangements continued £000s

%*

Experience losses(gains)

1

0.6

Effect of changes in demographic and financial assumptions

0

0

Total actuarial losses(gains)

1

0.6

Actuarial gains and losses during year

Liability(£000’s)

31/03/2006

Actives Deferreds Pensioners Dependant Pensioners

Total Present value of the scheme liabilities

01/04/2005

62

42

37

0

0

0

32

32

30

0

0

0

94

74

67

Liability calculation Present value of scheme liability at start of year Overnight increase in liabilities (change in real return) Current Service cost (net of employee contributions)

67 7 16 1

Interest cost

4

Actuarial Losses (gains)

1

Less Net Individual Transfers Out Present Value of Scheme Liabilities at end of year

page 53

£000s

Employee contributions

Less Benefits paid

*

31/03/2005

Here the amounts are expressed as a percentage of the present value of the scheme liabilities as at the balance sheet date

(2) 0 94


9.

Notional cost of capital

When calculating the surplus or deficit 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% (2005: 3.5%) of the average of total assets less total liabilities. After the surplus or deficit for the year there is an entry reversing this amount.

10. Taxation a) Analysis of the tax charge / (credit) in year: 2006 ÂŁ000

2005 ÂŁ000

Current taxation Adjustments relating to previous year

11

(385)

(2,748)

384

(2,737)

(1)

Deferred taxation Deferred Tax provision

page 54


NOTES CONTINUED 10. Taxation continued b) Factors affecting the tax charge (credit) for the year 2006 ÂŁ000

2005 ÂŁ000

(9,575)

(6,477)

(2,873)

(1,943)

2,053

1,828

(114,020)

(117,022)

Non relievable grant funded expenditure

106,048

110,566

Expenses not deductible for tax purposes

2,933

330

(112)

(2)

3

8

3,502

5,825

(388)

85

2,767

325

Adjustments to tax charge in respect of previous years

11

(385)

Permanent differences

87

-

11

(385)

Deficit for the period on ordinary activities (excluding the notional cost of capital) Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 30% (2005: 30%)

Effect of: Notional cost of capital Non Non taxable grant funding

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 / (utilization) of tax losses

page 55


11. Intangible operating assets Software Licences ÂŁ000 Cost As at 1 April

233

Additions in year

435

As at 31 March

668

Amortisation As at 1 April

88

Amortisation in year

98

As at 31 March

186

Net Book Value As at 31 March 2006

482

As at 31 March 2005

145

page 56


NOTES CONTINUED 12. Tangible operating assets Land & buildings £000

Fixtures & fittings £000

Computer equipment £000

Total £000

Cost or Valuation As at 1 April

1,108

3,734

2,809

7,651

Additions in year

0

0

301

301

Disposals in year

0

(3)

(39)

(42)

1,108

3,731

3,071

7,910

133

2,111

1,716

3,960

22

675

666

1,363

0

0

(32)

(32)

155

2,786

2,350

5,291

As at 31 March

953

945

721

2,619

At the beginning of the year

975

1,623

1,093

3,691

As at 31 March Depreciation As at 1 April Depreciation in year Disposals in year As at 31 March Net Book Value

The Net Book Value of tangible operating assets does not differ materially from the depreciated replacement cost of the assets.

13. Investment properties 2006 £000

2005 £000

Cost or valuation As at 1 April

100,515

81,587

Additions

1,379

1,662

Disposals

(8,154)

(3,489)

-

(2,000)

1,278

22,755

95,018

100,515

Transferred to Fixed Asset Investments Revaluations At the end of the year

page 57


14. Investments £000 Cost or valuation As at 1 April

15,696

Additions in year

8,950

Revaluation

159

As at 31 March

24,805

Provisions As at 1 April

747

Provided in year

481

Amounts written back

(469)

As at 31 March

759

Net Book Value As at 31 March

24,046

As at 1 April

14,949

The Agency’s principal investments relate to the North West Business Investment Scheme (BIS) the North West Seed Fund and The Rising Stars Growth Fund. The BIS has been primarily funded by the European Union with the objective of making equity based investments in SMEs in the North West of England.

Name

Interest

Nature

Type

Investment Valuation

North West Business Investment Scheme

80%

Provision of loans and equity finance in the North West Region

Limited Partnership

£12,337,563

North West Seed Fund

80%

Provision of loans and equity finance in the North West Region

Limited Partnership

£1,759,694

Rising Stars

47%

Provision of loans and equity finance in the North West Region

Limited Partnership

£7,948,851

Future capital receipts arising from development of a precinct in which NWDA has an interest following surrender of a leasehold to Allerdale Borough Council. TOTAL INVESTED FUNDS

£2,000,000 £24,046,108

page 58


NOTES CONTINUED 15. Interests In Subsidiaries, Associates And Joint Ventures Subsidiaries Name Estuary Management Company Limited Rural Regeneration Cumbria Limited

Interest 100% 81%

Nature

Type

Provision of Services at the Estuary Company Limited by Commerce Park Guarantee Regeneration for Furness and Cumbria

Company Limited by Guarantee

Associates Name

Interest

Nature

Type

New East Manchester Limited URC

33%

Regeneration of East Manchester

Company Limited by Guarantee

Liverpool Vision Limited URC

33%

Urban Regeneration of Liverpool

Company Limited by Guarantee

West Lakes Renaissance URC

20%

Regeneration of West Cumbria

Company Limited by Guarantee

Liverpool Land Development Company Limited

33%

Regeneration of Strategic Investment Areas in Liverpool

Company Limited by Guarantee

Management of Brunswick Business park

Company Limited by Guarantee

Brunswick Business Park Limited

Maryport Developments Limited

Elevate East Lancashire Limited

23.86%

20.4% ordinary share capital Management of the Development of Maryport Harbour 100% preference share capital 12.5%

To develop an integrated and coherent strategy for housing market renewal

Private Limited Company

Company Limited by Guarantee

Joint Ventures Name

page 59

Interest

Nature

Type

Regional Aggregation Body Limited

50%

Procurement and Distribution of Broadband Services

Limited Liability Partnership

Renewables NorthWest Limited

50%

Development of Initiatives for Renewable Energy

Company Limited by Guarantee


15. Interests Continued Investments in Subsidiaries

Agency Share

Estuary

Rural

Total

Gross Income

£297,419

£1,102,435

£1,399,854

£1,190,391

Gross Expenditure

£297,419

£1,065,943

£1,363,362

£1,160,832

NIL

£36,492

£36,492

£29,559

Profit/(Loss) after tax

1. NWDA has no material subsidiaries requiring the preparation of Group Accounts 2. The Estuary Management Company Limited is a non-profit making company. Any surplus/deficit is returned to/recovered from the tenants 3. Rural Regeneration Cumbria Limited has ceased trading. All of the assets and liabilities of the company will be transferred at their current value, on the date of transfer, to Cumbria Vision.

Rural

Total

Agency Share

NIL

£20,794

£20,794

£16,843

Current Assets

£280,739

£365,094

£645,833

£576,465

Gross Assets

£280,739

£385,888

£666,627

£593,308

Liabilities due within one year

£280,938

£262,855

£543,793

£493,850

NIL

£78,920

£78,920

£63,925

£280,938

£341,775

£622,713

£557,775

£(199)

£44,113

£43,914

£35,533

Estuary

Fixed assets

Liabilities due after one year Gross Liabilities Net Assets

page 60


NOTES CONTINUED Investments in Associates Net Assets Name

Total Net Assets / (Liabilities)

Agency Share

(£186,516)

(£62,172)

Liverpool Vision Limited URC

£405,874

£135,291

West Lakes Renaissance URC

£108,314

£21,662

Nil

Nil

Brunswick Business Park Limited

£59,050

£14,089

Maryport Developments Limited

£608,870

£124,209

Nil

Nil

New East Manchester Limited URC

Liverpool Land Development Company Limited

Elevate East Lancashire Limited

Investment in Joint Ventures Net Assets Name

Total

Agency Share £1

50p

£1,500

£750

2006 £000

2005 £000

As at 1 April

90,670

77,612

Additions in year

19,867

32,030

Disposals

(7,746)

(2,358)

(763)

(11,589)

(10,894)

(9,896)

3,447

4,871

94,581

90,670

Regional Aggregation Body Limited Renewables NorthWest Limited

16. Development assets Name

Amounts written down: European aid-Funded Amounts written down: Grant In Aid-Funded Revaluations As at 31 March

page 61


17. Debtors 2006 £000

2005 £000

Trade debtors

10,022

16,018

Grant in Aid debtor

95,889

41,499

Other debtors

6,738

3,521

Prepayments and accrued income

1,497

2,711

-

1,789

3,639

6,354

67

26

-

516

117,852

72,434

2006 £000

2005 £000

Value Added Tax European Regional Development Fund Rural Loans Corporation Tax

Intra-government balance analysis:

Balances with other central government bodies Balances with local authorities Balances with bodies external to government

102,151

42,429

2,514

1,114

13,187

28,891

117,852

72,434

page 62


NOTES CONTINUED 18. Creditors: Amounts falling due within one year 2006 £000

2005 £000

Trade creditors

33,097

24,119

Accruals

87,209

49,731

Other creditors

2,895

3,951

Deferred Income

3,426

2,621

Other Taxes and social security

460

391

Value Added Tax

638

-

127,725

80,813

2006 £000

2005 £000

Balances with other central government bodies

11,453

682

Balances with local authorities

55,600

6,487

134

576

60,538

73,068

127,725

80,813

Intra-government balance analysis:

Balances with NHS trusts Balances with bodies external to government

page 63


19. Creditors: Amounts falling due after more than one year 2005 £000

2006 £000 Deferred Income – Other Deferred Income - European Capital Grants

616

-

19,659

15,692

20,275

15,692

20. Provisions for liabilities and charges Deferred tax £000 As at 1 April Charge / (credit) to the Income & Expenditure account As at 31 March

Dilapidations Environmental £000 £000

Total £000

2,748

218

340

3,306

(2,748)

760

(340)

(2,328)

-

978

-

978

21. Deferred tax The major elements of deferred taxation are as follows: 2006 £000

2005 £000

Accelerated capital allowances

-

3,766

Short term timing differences

-

(26)

Tax losses

-

(992)

-

2,748

A potential deferred tax asset totalling £10.5m has been calculated by the Agency’s tax advisers for 2005/06 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 FRS 19, an asset has not been recognised in the accounts.

page 64


NOTES CONTINUED 22. Government grant reserve 2006 £000 As at 1 April

2006 £000

2005 £000

2005 £000

204,287

172,089

301

592

Tangible Operating Assets Additions Depreciation Disposals

(1,363)

(1,383)

(10)

(9)

Intangible Operating Assets Additions Amortisation

435 (98)

111 (47)

Investment Assets Additions Disposals

1,379 (8,154)

Revaluations

1,662 (3,489)

1,278

735

22,019

Development Assets Additions Disposals Amounts written off

16,832

20,584

(7,746)

(2,357)

(10,894)

(9,896)

Amounts written back

2,069

Revaluations

3,447

2,802

3,528

2,637

Fixed Asset Investments Additions Amounts written off

(481)

(195)

Amounts written back Environmental Provision

(171)

1,545

167 340

310

RAB Loan Additions

650

Amounts written off Amount released to I&E Account Release of Grant in Aid funding Coalfield asset additions As at 31 March

page 65

(650) (28,406)

(14,721)

(1,368)

(6,093)

3,035

410

204,553

204,287


23. European funding reserve 2006 £000

2005 £000

14,144

17,471

554

812

(5,172)

(4,139)

9,526

14,144

2006 £000

2005 £000

As at 1 April

(9,089)

(9,089)

As at 31 March

(9,089)

(9,089)

As at 1 April Interest received Transferred to Deferred Income As at 31 March

24. Income and expenditure reserve

25. Reconciliation of net cashflow to movement in net funds 2006 £000

2005 £000

As at 1 April

26,749

34,344

Increase in cash for the period

(7,379)

(7,595)

As at 31 March

19,370

26,749

page 66


NOTES CONTINUED 26. Contingent liabilities At 31 March 2006 there were no significant contingent liabilities (2005: nil).

27. Commitments (a) Operating leases As at 31 March 2006 the Agency had annual commitments under operating leases as follows: 2006 Buildings £000

2006 Others £000

2005 Buildings £000

-

37

-

121

- between one and five years

110

157

-

131

- over five years

996

-

1,110

-

1,106

194

1,110

252

2005 Others £000

Leases expiring - within one year

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:

2006 £000 Authorised by the board and contracted

38,795

2005 £000 45,022

28. 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.

page 67


29. Post balance sheet events DEFRA and the Regional Development Agencies have been working together to devolve to the RDA’s responsibility for delivering socio-economic funding under the EU Rural Development Regulation. The Heads of Terms on the key principles for the transfer of responsibilities were agreed in February 2006 and the final terms of the transfer will be subject to discussion over the coming months with a view to the transfer being effective from 1 October 2006.

30. Related party transactions The Northwest Regional Development Agency is a Non-Departmental Public Body sponsored by The Department of Trade and Industry (‘DTI’). DTI 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 English Partnerships (EP), and Small Business Service (SBS). Other Regional Development Agencies are also sponsored by the DTI 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 of 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 below. (a) Subsidiary and associated undertakings

Connected Party

Sales / (Purchases) £

Debtor/ (Creditor) £

Subsidiary undertakings The Estuary Management Company Limited

85,341

23,036

(983,643)

-

New East Manchester Limited

(7,141,365)

-

Liverpool Land Development Company Limited

(3,212,840)

-

(532,618)

-

Brunswick Business Park Limited

-

-

Furness West Cumbria New Vision Limited – trading as West Lakes Renaissance

-

-

Rural Regeneration Cumbria Associated undertakings

Liverpool Vision Limited

page 68


NOTES CONTINUED 30. Related party transactions continued Connected Party

Sales / (Purchases) ÂŁ

Debtor/ (Creditor) ÂŁ

Associated undertakings Continued Maryport Developments Limited Ancoats Urban Village Company Limited

(30,842)

-

-

-

(5,671,640)

-

(910,000)

-

(2,368,421)

-

-

-

(12,659)

-

Joint ventures Northwest Business Investment Scheme Northwest Seed Fund Rising Stars Northwest Regional Aggregation Body Limited Renewables Northwest Limited

page 69


(b) Board Members

Name & Position

Income to Payments made the Agency to Organisations £ £

Nature of transaction

Related Party

Position

Lancaster University

Pro Chancellor

-

2,215,546

Grant claims

Trustee

-

4,634,876

Grant claims

-

1,782,256

Grant claims

-

44,202

Grant claims

135,199

Grant claims

Bryan Gray MBE, DL Chairman

National Museum Liverpool University of Central Lancashire Learning & Skills Council (National) Culture Northwest

Honorary Fellowship Board Member Board Member

50,195

Professor Sir Martin Harris Board Member New East Manchester Limited

Board Member

-

7,141,365

Grant claims

University of Salford

Chancellor

-

1,123,143

Grant claims

MIDAS

P/T Executive Chairman

813

2,357,581

Grant claims

Asian Business Federation

Member

-

1,345

Grant claims

University of Salford

Council / Finance Committee

-

1,123,143

Grant claims

Trustee

-

1,981,885

Grant claims

Director

-

213,166

Goods and services

Director

-

532,618

Goods and services

Director

376

2,506,463

Grant claims

Director

5,653

3,220,885

Grant claims

Councillor / Leader

124,992

109,823

Grant claims

Trustee

-

4,634,876

Grant claims

Anil Kumar Ruia OBE Board Member

The University of Manchester Granada Television Limited Cllr Mike Storey CBE Board Member Liverpool Vision The Mersey Partnership Liverpool Land and Development Co’ Liverpool City Council National Museum Liverpool

page 70


NOTES CONTINUED 30. Related party transactions continued (b) Board Members Continued

Name & Position

Related Party

Income to Payments made Nature of the Agency to Organisations transaction ÂŁ ÂŁ

Position

Brenda Smith Board Member Liverpool Vision

Director

2

-

532,618

Goods and services Goods and services

Granada Television Limited

Non-executive Deputy Chair

-

213,166

University of Salford

Member

-

1,123,143

Grant claims

North West Vision

Member

-

1,016,261

Grant claims

The University of Manchester Business in the Community

Member

-

1,981,885

Grant claims

Member

-

124,187

Grant claims

-

311,322

Grant claims

-

1,981,885

Grant claims

-

(103,820)

Credit against claim

Leader

-

4,808,499

Grant claims

Member

-

121,177

Grant claims

Board Member

376

2,506,463

Grant claims

Chair and Director

-

15,813

-

3,226,792

Grant claims

-

157,056

Grant claims

2,506,463

Grant claims

134,733

Grant claims

Dr Pauleen Lane CBE Board Member Trafford Metropolitan Mayor & Elected Member Borough Council The University of Employee Manchester English Partnerships

Vice Chair

2

Marie Rimmer CBE Board Member St Helens Metropolitan Borough Council St Helens Chamber of Commerce The Mersey Partnership The World of Glass (St Helens) Ltd

Goods and services

Maureen Williams Board Member Liverpool John Visiting Professor Moores University of Sociology Learning & Skills Member 2 Council (Merseyside) The Mersey Board Member Partnership

376

Dave McCall Board Member Learning & Skills Council (Manchester)

page 71

Member

2

-


(b) Board Members continued

Name & Position

Income to Payments made the Agency to Organisations ÂŁ ÂŁ

Nature of transaction

Related Party

Position

Mersey Basin

Chairman & Member 2

-

253,788

Envirolink (North West) Ltd

Chairman

-

1,326,507

ENCAMS

Council Member

-

27,000

Grant claims

Lantra

Director

-

1,141

Grant claims

Myerscough College

Chief Executive

-

1,122,055

Grant claims

Director

-

7,577,784

Grant claims

-

203,906

Grant claims

Joe Dwek CBE Board Member Grant claims Goods & services, grant claims

Professor John Moverley OBE, Board Member

Lancashire Business Link Learning & Skills Council (Lancashire)

Board Member

2

David Brockbank Board Member Rural Regeneration Cumbria

Director

-

985,000

Grant claims

Lancaster University

Member

-

2,215,546

Grant claims

Cumbrian Tourist Board

Member

-

2,132,873

Grant claims

-

2,215,546

Grant claims

-

900,403

Grant claims

-

2,855,339

Grant claims

-

44,202

Grant claims

2,357,581

Grant claims

Peter Hensman Board Member

Cumbria Rural Enterprise Agency

Deputy ProChancellor 1 Vice Chairman

Salford City Council

Leader

Lancaster University

John Merry Board Member

Learning & Skills Council (National) MIDAS Learning & Skills Council (Manchester) Marketing Manchester

Board Member

2

Director

813

Member

-

134,733

Grant claims

Director

-

1,248,340

Grant claims

Notes 1=

Indirect interest

2=

NWDA Representation

page 72


North West Development Agency Accounts direction given by the Secretary of State, with the approval of the Treasury, in accordance with Section 14(2) of the Regional Development Agencies Act 1998. The annual accounts of North West Development Agency (hereinafter referred to as “the Agency�) shall give a true and fair view of the income and expenditure and cash flows for the financial year, and the state of affairs as at the year end. Subject to this requirement, the Agency shall prepare accounts for the financial year ended 31 March 2006 and subsequent financial years in accordance with: a. The Government Financial Reporting Manual (FreM)1 issued by HM Treasury and as amended from time to time; b. Other guidance which the Treasury may issue from time to time in respect of accounts where the requirement is to give a true and fair view of the financial statements; and c. Any specific disclosures required by the Secretary of State. except where agreed with the Treasury, in which case the exception shall be described in the notes to the accounts. This direction replaces that dated 10 March 2004.

Signed by authority of the Secretary of State for Trade and Industry

09 November 2005

page 73

Assistant Director in the Department of Trade and Industry

http://www.nwda.co.uk/pdf/Annual_Report_2006  

http://www.nwda.co.uk/pdf/Annual_Report_2006.pdf

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