Page 1

chairman's foreword "It is, my pleasure to present the

Northwest Development Agency's Annual

Report and Financial

Statements for the year

This has been another very busy and

positive year during which we have

continued to focus on the need to engage our partners right across the region in the delivery of the Regional Strategy. The sheer scale of partner en'gagement and progress in

tackling regional priorities was illustrated in the Regional Strategy Annual report,

published in March 2001. Much of the added value that the Agency brings to the region is the encouragement and facilitation of partner

contribution to Regional Strategy objectives and priorities and we will ensure that this role remains at

the forefront of our activities.

,"

The year wae notable in many respects and I

would like to highlight a number of

ended 31 st March 2001 "

developments which demonstrate how this

region is moving forward to meet the challenges of the future.

15 i


. Great strides have been made to equip our

A key dimension of skills is knowledge and

people with the skills needed to prosper as

one of the major challenges for this region is

individuals and help develop the region's

to exploit the extensive knowledge base

economy. The region now has five Local

contained within our Universities. The North

Learning and Skills Councils (LLSCs). which

West Universities Association, established in

connect the region to the national learning

the previous year, has gone from strength to

and skills agenda. The Agency is

strength in securing university collaboration

represented on each of these, thus ensuring

and collective contribution to the regional

that the subject of skills is firmly embedded

economic development agenda. This region

within the wider regional economic policy

is now witnessing previously unprecedented

context. Between them our five LLSCs have

levels of inter-university co-operation around

an annual budget of ÂŁ760 million and

regional economic priorities.

therefore have a very significant role indeed

in raising the level of skills across the region.

The Universities are also key partners in the

North West Science Council which was

established as a result of last year's review

of the future of the region's science base following the loss of Project Diamond to

Oxford. i am personally delighted that the Agency was able to play a key role in

securing Government support for such a review, in obtaining the active participation of relevant regional partners and in the final result: the Science Council and a

ÂŁ174 million package of specific projects

to maintain and develop the science base.

16 J


;:,

It is not only university co-operation that is The situation in Liverpool arid Manchester, unprecedented. Decades of economic rivalry should not, however, over-shadow the

between the region's great cities of Liverpool excellent partnership arrangements that are and Manchester have been replaced by also in place right across the region and partnership and collaboration. The Regional which are delivering real improvements on Strategy identifies these two major the g(ound. For instance, the Single

metropolitan areas and their city-regions as Regeneration Budget (SRB), a good example

key to improving the overall economic of multi-agency and multi-sector partnership performance of the region. Over the past working to ~eliver local regeneration

year the Agency and Liverpool and initiatives, supported the attraction or

Manchester City Councils have worked safeguarding of over 30,000 jobs in the successfully with public and private partners region's most deprived communities during from both ends of the Mersey belt on the the year. Round 6 of that programme,

Liverpool-Manchester joint visioning study. announced by the Agency in August 2000, Although not yet complete the study has also highlighted the way in which NWDA

already identified further areas of investment can lever in other public and i

complementary activity where Manchester's private sector resources with the Agency role as a regional capital can be married with providing just ÂŁ231.5 million of the

Liverpool's unique attributes and distinctive ÂŁ1000 million funding package.

economic strengths.

The City of Liverpool

1~~ ;,m; MANCHESTER CITY COUNCIL

17 i


It has, however, not all been good news. The National Audit Offce. i hope that the few outbreak of Foot and Mouth Disease has had illustrations i have provided and the

a devastating impact on an already achievements set out in the rest of this )

vulnerable rural economy, especially in report show that we are truly adding value to Cumbria which is the country's most badly this region.

affected area. i am proud that, in very

difficult circumstances, this Agency moved i would like to end by paying tribute to my

rapidly to develop, with partners, an colleagues on the Board who make immediate survival plan, negotiated that plan important'personal contributions to the day

with Government and secured a ÂŁ16 million to day work of the Agency as well as taking

funding package which is now providing collective policy decisions, and to the Chief support to the tourism economy and other Executive i;ind his staff whose commitment,

affected sectors. I believe that no other drive and energy seem to know no bounds. organisation could have represented the

region's interests in this matter so

i hope you enjoy the review of the Agency's

effectively.

activities in the rest of this report.

In summer 2000 Ministers re-affirmed the

. .

Government's commitment to Regional

~~,~ of lv~ichf1A. Lord Thomas of Macclesfield CBE

Development Agencies and their role as Chairman strategic drivers of economic development in the regions. That commitment was

demonstrated by additional resources and budget flexibility, which will come on stream

in 2002, and is a testament to the speed at which RDAs, since their inception in April 1999, have become established and mature organisations. The Northwest Development

Agency has certainly done that and i am

pleased to report that the way in which we manage our affaks and taxpayers.' money

has been given the full approval of the


the board

The Board of the Northwest Development Agency consists of Lord Thomas of Macclesfield CBE

13 members and is

Chairman of NWDA, Lord Thomas was made

a Labour life peer in 1997. Lord Thomas is a

chaired by Lord

member of the Regional Policy Forum which

seeks to advance the debate on regional

--~Th~om-as~of~~~--- -

economic development and governance issues, President of the Society for

Macclesfield.

Co-operative Studies, Honorary President of the North West Co-operative and Mutual Council and a member of the North West NHS Advisory Board. He also has a number

of wide-ranging charitable interests.

19J


Councilor Mike Doyle JP John Dunning CBE, JP ,

Deputy Chairman of the NWDA. Assistant Director of Westmorland Ltd. Chair of the

Chief Executive of Business Skills (St Helens) NWDA Rural Sub Group and has lead and St Helens MBC Labour Councillor. Lead responsibility within the NWDA for rural

responsibility within the NWDA for issues including agriculture, tourism and Infrastructure and Transport. Member of the market towns. Also a member of the NWDA NWDA Audit Committee, the Rural Sub Audit Committee.

Group, Skills Sub Group and the Regeneration Sub Group. RDA

representative on the Merseyside Learning

and Skills Council.

Maggie Chadwick

Felicity Goodey CBE

Self Employed Consultant and Director

Director of Precise Communications and

of Furness Enterprise. Lead responsibility

Chair

within the NWDA for Education, Skills

Company- The Lowry. Chair of the

. and e-Iearning. Chair of the NW Skills and

of the National Millennium Arts

North West Cultural Consortium and takes

Learning Forum and of the NWDA Skills Sub

lead responsibility within the NWDA for

Group. RDA representative on the Cumbria

Culture, Media, Communications and the

Learning and Skills Council. Also member of

Creative aspects of ICT. Felicity chairs the

the NWDA Business Development

newly formed NwbA Marketing Sub Group.

Sub Group.

110 i

==-r


Clive Jeanes OBE

Alan Manning

Chairman of Wigan Borough Partnership.

North West Regional Secretary of the Trades

Takes lead responsibility within the NWDA

Union Congress. Takes lead responsibility within

for Manufacturing and Business Excellence.

the NWDA for Social

RDA representative on the NW Industrial

Minorities, Crime and Disorder and is Chair of

Development Board and the Cheshire

the NWDA Social Inclusion Sub Group. Member

Learning and Skills Council. Member of the

of the NWDA Skills Sub Group, Regeneration

NWDA Skills Sub Group, Business

Sub Group and Business Development

Development Sub Group, the Social Inclusion

Sub Group. RDA representative on the Greater

Sub Group, the Marketing Sub Group and

Manchester Learning and Skills CounciL. Also

the Audit Committee.

Member of the NWDA Remuneration Committee.

Councilor Richard Leese CBE

Dennis Mendoros OBE

Labour Leader of Manchester City Council.

Managing Director of Euravia Engineering. Chair

Takes lead responsibility within the NWDA

of the NW Aerospace Alliance and member of

for East Manchester and relationships with

the NW Bank of England Economic PaneL. Chair

Local Authorities. Member of the

of Pendle Partnership and Director of Northern

Regeneration Sub Group and the Business

Technologies. Chairs the NWDA led NW

Development Sub Group.

Innovation and Technology Advisory Board.

Inclusion, Black and Ethnic

Chair of the NWDA Audit Committee and the NWDA Business Development Sub Group.

Takes lead responsibility for Innovation,

Technology, Foresight, the e-commerce

element of ICT and Aerospace.

i 11 J


Kath Reade

Judy Robinson

Chair of East Lancashire Health Authority.

Chair of the Voluntary Sector North West and

Takes lead responsibility within the NWDA

Director of Greater Manchester Centre for

for Regeneration, including Health,

Voluntary Organisations. Takes lead

Environment, Derelict Land and Housing.

responsibility within the NWDA for Voluntary,

Until recently was Chair of the NW Health

Mutual and Charitable sectors. Member of

Partnership. Chair of the NWDA

the NWDA Social Inclusion Sub Group and

Regeneration Sub Group, member of the

the Regeneration and Marketing Sub Groups.

NWDA Skills Sub Group and the

Social

Chairs the Social Economy Task Group

Inclusion Sub Group. Also the RDA

which is a cross sector group under the

representative on the Lancashire Learning

aegis of NWDA.

and Skills Council.

James Ross .

Councilor Dr Fred Ridley

Chairman of the Littlewoods Organisation

Liberal Democrat Leader of Stockport MBC.

and the National Grid Group. Lead

Takes lead responsibility within the NWDA

responsibilities for Liverpool City Centre and

for SMEs and Business Support. Member of

the private sector in Liverpool. Member of

the NWDA Rural Sub Group, the Business

the NWDA Business Development Sub Group

Development Sub Group and the Audit

and the NWDA Remuneration Committee.

Committee. RDA representative on the NW

Industrial Development Board. Full details of the Board Members interests are available from the Agency's Headquarters in Warrington.

112 i


ch ief execu tive's review of the year i

r

(

,

p~' i

. ~~~;짜i ./-,'/

As the Agency mOves into its third full

2001 and the sterling work being undertaken

operational year it is satisfying to look back

by our partners is illustrated in detail in the

over the last year and

recognise the

Regional Strategy Annual Report which we

significant progress we have made towards

launched at

that event.

del i ve ri ng _ou r _0 b j ectives._ Th ro ug h 0 uU h e-l ast

year we have further mobilised the region to deliver the Regional Strategy and it has been extremely encouraging

to see the

ever-increasing partner involvement.

This was demonstrated quite clearly at the Regional Strategy event that we held at the

11

Philharmonic Hall, Liverpool on 26 March

113 J


Towards the end of the financial year the

Science and Daresbury Development Group

region's rural areas were hit hard by the

ensured that the issue remained high profile

outbreak of Foot and Mouth Disease, none

across the region whilst ongoing discussions

more so than Cumbria where the impact has

and negotiations took place to secure the

been especially severe. i was keen from the

future of the science base in the region. The

outset that the Agency should be

Science Review Team recommended that the

instrumental in engaging appropriate

Government fund £26 million of projects in

partners to address the situation. As a result,

support of the science base and the

a £16 million funding package has been

Government subsequently agreed to this.

established, which is supporting a number of

The Secretary of State for Trade and Industry

short-term measures to help businesses in

then agreed the further recommendations of

tourism and other sectors survive.

the Development Group and during the

A Rural Recovery Action Plan is also being

'forthcoming year we will take forward and

developed which will seek to provide

implement measures included in the agreed

longer-term solutions to the fundamental

£174 million funding package for science

problems faced by the rural economy, that

projects in the Northwest through the

have been brought into sharp focus by the

recently established Implementation Group,

Foot and Mouth Crisis.

chaired by the Agency, and involving Government Office North West (GONW),

As the. year

.

had-ended -with-acmajor-- ---the -reg ion' s- U n iversities~-the-N HS;-Daresbury

challenge so had it begun, with the Management and representatives from the Government's decision to site Project private sector.

Diamond at Oxford rather than Daresbury.

Work has continued throughout the year to address the consequence of that decision and our seat on the Science Review Team

and representation on the North West

114 J

1


The year 2000/01 was again characterised

by the Agency's administration of eleven we are doing with partners to support and

separate national programmes, each with stimulate the business sector clusters, their own allocation and rules and whose growth are essential to the future

regulations, which limited the extent to which prosperity of the Northwest.

truly integrated solutions to regional and

local needs could be developed. However, We have already made substantial progress there was good news in July 2000 when the in the development ofthe region's priority Government agreed that RDAs would have business sectors. Extensive research of each the freedom and flexibility to apply resources of the sectors has taken place and we are

to regional priorities through a single, cross now well placed to see through the full Departmental budget from April 2002. The implementation of the Cluster Development

Agency quickly responded to this opportunity Programme. This has been complemented by and during the second half of the year we the development of an incubation

established a set of priorities to be applied to programme aimed at business - providing - -".. -

the single budget which will ensure that all space for new companies in priority sectors. our resources are directed at activities that We are particularly pleased with the progress

meet the needs of the region. Within the made in the bio-medical sector, which future resources and budget freedom made resulted in the successful launch of the

available to us, the Agency will invest more biotechnology cluster, ~ionow, and links

in the economic development agenda. In clearly to the work we are doing to develop particular we will be able to expand the work the science base in the region.

115 )


In August 2000 the Agency announced a Partnerships (LSPs). The Agency will work

funding. package of £1 billion for 20 with LSPs in priority areas to agree holistic regeneration partnership schemes across the regeneration strategies and programmes,

region, under Round 6 of the Single utilising all possible sources offunding, Regeneration Budget (SRB) which including resources from the Agency. The highlighted our commitment to improve the establishment of our Area Offices is a key

quality of life and opportunities for thè step to help cascade Regional Strategy Northwest's most deprived communities. objectives down through the sub-regions to Of that £1 billion, the Agency's contribution local regeneration initiatives. was £231.5 million, with the rest being

provided by the public and private sector.

-~~".",.

Following the Government's decision early in

2001 to discontinue the national SRB

programme, we decided to consult all of our regional partners on the future priorities for regeneration activity in the region and on the nature of a new regeneration programme.

That consultation has now taken place. During 2001/02 we will agree with partners regeneration strategies and priorities for

each sub region, which we expect to be delivered through Local Strategic

116 J

I .í ! i


Turning now to our key achievements during

Development Fund projects as part of the

2000/01, I have already mentioned the

delivery of the Regional Learning and Skills

significant progress we have made through

Strategy;

our work on cluster development, which

. The establishment of the Northwest's

underpins so much of our business

Regional Intelligence Unit (RIU);

development activity. Other successes

.

. With our respective partners the launch of

include:

the rraster-plans for the comprehensive redevelopment and regeneration of

. Direct involvement in the attraction of 24 concluded

Liverpool City Centre and East Manchester;

inward investments or

. Co-ordination of the region's response to

expansions to the region, resulting in over

the Government's ten-year transport plan,

3000 jobs being attracted or safeguarded;

Transport 2010;

. The launch of the Regional Innovation

. Establishment of the Regional Marketing

Strategy and the subsequent development

Forum to develop a strategy to improve the

of the business incubation programme;

image of the Northwest.

. With our partners British Trade

International, the launch of the Northwest

International Trade Strategy; . Success around the Skills agenda,

including the funding of 75 Skills '\

117 i


11

Northwest Development Agency i

fi n ancia

statements 2000/01 Foreword to the Financial Statements Statutory Background The Northwest Development 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 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 under the provisions of the

Regional Development Agencies Act 1998.

The business of Inward Ltd was transferred into the Agency by a Business Transfer ________..________~___._______L_______.___~__~~____._.~___. _____~____.___._____,_ Agreement on 1 April 1999.

,i

These accounts have been prepared in the form directed by the Secretary of State for the

Environment, Transport and the Regions and the Accounts Direction is set out on pages 109 to 113.

i 69 J

1


Greening Government

Public Information . A Register of Board Members interests is

available for public inspection at our Head

We have continued to ensure that our

Office in Warrington;

practices are sustainable and

. Summaries of the minutes of Board

environmentally friendly and we have

Meetings are published on the Website

ensured that our Procurement Practices

each month;

meet the Greening Government objectives.

. We held an Annual General Meeting on 8

Other examples include:

September 2000. Over 400 people

attended to hear a summary of our . The use of recycled paper for copying and

achievements during the financial year printing. Waste paper is also collected and 1999/2000 and also to ask questions of the recycled;

Chief Executive and Board Members about . The use of furniture which is made of fully

our work; recyclable materials;

. The Chief Executive and Board Members . Extensive use of e-mail; formally met

representatives of the North . Video conferencing facilities available at our

West Regional Assembly in May 2000 and offices in Warrington, Manchester and October 2000.

Penrith to reduce inter-offce travel.

J

We have produced regular press releases

We expect to finalise our Greening Policy

detailing our activities and, where .

early in 2001/02, which will include the

appropriate, giving a re?ponse to particular

setting of challenging targets to reduce

decisions that could have a significant

energy consumption within our offices. We

impact on the region.

have already made a significant start with

this by designing energy effciency into our new Headquarters, such that a "very good"

Building Research Establishment Environmental Assessment Method -~-(BREEAM)'rati ng-isexpected -when- the---~-~---

building is completed in 2002.

168 i


11 Results for the Year and Transfer to/from Reserves The results for the year ended 31 March 2001 are contained in the attached Financial

Statements. There was a surplus for the year of £3.89 million after taxation

(2000: £3.22 million - deficit) which was transferred to reserves carried forward.

Review of Activities During the year the Agency continued to operate its programmes of activity across the Region. Details are contained on pages 29 to 60 of the annual report.

Significant Changes in Fixed Assets On 1 April 2000 investment assets with a value of £91.77 million were held by the Agency.

During the year there were disposals from this portfolio with an aggregate book value of

£5.96 million and which realised £5.93 million. At 31 March 2001 the investment asset portfolio was professionally revalued at £90.27 million and the resultant surplus of

£2.98 million was transferred to the Government Grant Reserve.

Post Balance Sheet Events

With effect from 1 April 2001 full responsibility for the Partnership Investment Programme in the Region transferred from English Partnerships. Related assets and liabilities transferred to

the Agency on that date. Itis not possible at this time to place a financial value on those transfers. Net assets transferred will be brought into account during 2001/02.

On 8 June 2001 the Government announced that sponsorship of the Agency was transferred

from the Department of the Environment, Transport and the Regions to the Department of Trade and Industry.

Future Development The Agency is entering a transitional year in 2001/02 in readiness for the full implementation

of the Single Financial Framework from 1 April 2002. In addition the increasing focus of the .--..-.. ._.....__._---_._---._--_._-._-.-----_._--- -- -----.-_.__.~.._--~-----._---..--_.._..._-~.__.._--------,-----~.,---- .'. ----_._-----_._------_._~--- ----,--_._..........._-_._---,-_..._.,--...._- - .. -._----_.- ".....- - - --- -.. - ------- ----_.._.-

Agency on economic regeneration is expected to continue.

Statement of the Agency's and Chief Executive's Responsibilties Under section 14 of the Regional Development Agencies Act 1998 the Agency is required to - ,.' p re p areasta t e men tot ac C OU n tfo reaÇ hfir;ar: c Lal,year,irith eAo mi,ai:QQ n"t/; e;easis".,,. ...~ "':""

determined by the Secretary of State, with the consent of Treasury. The accounts are prepared on an accruals basis and must give a true and fair view of the Agency's state of

170 J


11 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 accounts the Agency is required to: . observe the accounts direction Issued by the Secretary of State, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a

consistent basis;

. make judgements and estimates on a reasonable basis; . state whether applicable accounting standards have been followed, and disclose and explain any material departures in the financiål 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 the Environment, Transport and the Regions has designated the Chief Executive as the Accounting Officer of the Northwest Development

Agency. His responsibilities às Accounting Officer include responsibility for the propriety and regularity and value for money of the public finances, following guidance issued by

Government; 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.

Board Members Secretary of State on 14 December 1998 include

The Board Members appointed by the

Local Authority, Trade Union, Community and private sector representatives.

The Chairman was appointed for a period of three years. Board members were also appointed for three years and their corporate responsibilities are detailed in the Code of Best Practice for the Board of the NWDA which is a public document available from the

Agency's offices.

The members are as follows: Lord Thomas of Macclesfield CBE, Chairman ¡: 0 rm er-- M ari aQiri QcD i reçti¡r-Qf,:rhe-G 0 -pper:at i ye.Sank ..._-

Area of Responsibility: Relations with Government Ministers/ the Regional Assembly and Venture Capital

171 J


11Councillor Mike Doyle JP, Deputy Chairman of the Agency and Board Member of the

St Helens Chamber of Commerce

Area of Responsibility: . Infrastructure and Transport

Maggie Chadwick, Self employed Consultant and Director of Furness Enterprise Area of Responsibility: Education, Skills and Learning ICT (e-Iearning)

John Dunning CBE,JP, Director of Westmorland Limited Motorway Services

Area of Responsibility: Rural Issues including Agriculture, Tourism and Market towns

Felicity Goodey CBE, Director, Precise Communications, Chair of the Lowry Centre Trust

Area of Responsibility: Culture, Media, Communications and the creative aspects of ICT

clive Jeanes OBE, Chair of Wigan Borough Partnership and Chairman of the Education and

Lifelong Learning Partnership for Wigan. Area of Responsibility: Manufacturing / Business Excellence

Councilor Richard Leese CBE, Leader of Manchester City Council

Area of Responsibility: East Manchester and relationships with Local Authorites Alan Manning, North West Regional Secretary for the TUC Area of Responsibility: Social Inclusion, particularly Black and Ethnic Minorities, and Crime

and Disorder

Dennis Mendoros OBE, Managing Director of Euravia Engineering, Chair of the NW Aerospace Alliance, Chair of Pendle Partnership, Director of Northern Technologies

Area of Responsibility: Business Development, Innovation Technology and the e-commerce element of ICT ---- _._._._---_._----.__._----,----.-------_._-------~--------'-_.__..__._--.-_.__._---~---._------_.._-_._. ---_._----_..._-_._~-~_._---~-----_.__.~._------_..__.-------._-_._----------

Kath Reade, Chair of the East Lancashire Health Authority Area of Responsibility: Regeneration including Health, Environment, Derelict Land

and Housing

Councilor Dr Fred Ridley, Leader of Stockport MBC,

Area of Responsibility: SMEs, Business Support

i 72 J

j


11 Judy Robinson, Chair of

Voluntary Sector North West and Director of the Greater

Manchester Centre for Voluntary Organisations.

Area of Responsibility:

Voluntary; Mutual and Charitable Sectors

James Ross, Chairman of Littlewoods Organisation, Vice Chairman of the North West Business Leadership Team and Chairman of the National Grid Group.

Area of Responsibility:

Liverpool City Centre, and the Private Sector in Merseyside,

Board members are contracted to carry out two days work per month on behalf of the Agency. The Chairman is contracted for 2 days per week and the Deputy Chairman 1 day per week.

The Agency maintains a Register of Board Members' Interests which is available on request by contacting the Director of Corporate Services at the Agency's offices in Kings Court, Warrington. Members declare their interests to the Board in any transactions involving

the relevant organisations and do not participate in any discussions or vote on any related matters.

Appointment of Chief Executive On 14 December 1998 Michael Shields was appointed as Chief Executive for afixed term of five years.

Employment of Disabled Persons The Agency gives full and fair consideration to all applications for employment from disabled

persons having regard to their particular aptitudes and abilities.

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 Principal Civil Service (PCS) and Institute of Professionals, Managers

and Specialists (IPMS) Trade Unions together with staff representatives; a Health and Safety

Committee; and staff events to communicate key issues and receive feedback.

Better.Payment Practicecode The Agency is committed to the Better Payment Practice Code (previously the CBI Prompt Payment Code) and aims to pay all undisputed invoices either within 30 days or the terms agreed with the supplier (minimum 95%).

173 J


11 In 2000/01 the Agency did not achieve this target paying 79% (2000: 95.4%) of invoices on time. The Agency is committed to achieving a high standard of performance and sees prompt payment as a factor in achieving regeneration.

Financial Memorandum The Secretary of State issued the Agency with a new 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 2000/01.

Statement on the System of Internal Financial Control The Statement set out below relates to the Northwest Development Agency only.

As Accounting Offcer I acknowledge my responsibility for ensuring that an effective system of internal financial control is maintained and operated by the Northwest Development Agency.

The Board of Speke Garston Developments Limited is responsible for the maintenance and

operation of the system of internal financial control in that body.

The system of internal financial control can provide only reasonable and not absolute assurance that assets are safeguarded, transactions authorised and properly recorded,

and that material errors or irregularities are either prevented or would be detected within a

timely period.

The system of internal financial control is based on a framework of regular management information, financial regulations and delegation, administrative procedures, including the segregation of duties and a system of del,egation and accountability. Delegation and

maintenance of the system is undertaken by Executive Managers within the Northwest DeVelopment Agency. In particular the system includes various levels of delegation specified

by HM Treasury, the Department of the Environment, Transport and the Regions and the

Board of the Northwest Development Agency.

174 J


11 In particular it includes: . Processes which produce reliable financial information and proper accounting records; . Comprehensive Agency Financial Regulations and Delegations;

. Comprehensive budgeting system with an annual budget which is reviewed by the Management Team and the Board;

. Regular reviews by the Management Team and the Board of periodic and annual financial

reports which include financial performance against forecasts and allocations; . Setting targets to measure financial and other performance;

. Clearly defined capital investment control guidelines; . Appropriate appraisal and

compliance processes;

. Formal project management disciplines.

The Northwest Development Agency has an internal audit service, the work of which operates to the standards set out in the Government Internal Audit ManuaL.

PricewaterhouseCoopers were appointed as the Agency's Internal Auditors, by the Audit Committee in October 1999. The work of the internal auditors is informed

by an analysis of

the risk to which the Agency is exposed. The Northwest Development Agency has established an Audit Committee of the Board to

oversee the work of the internal audit function.

My review of the effectiveness of the system of internal financial control is conducted through

the work of the Internal Auditors, the Audit Committee and the Board and the comments

made by the external auditors in their management letter and other reports. As Accounting Officer I am aware of the recommendations of the Turnbull Committee and I

am taking reasonable steps to comply with the Treasury's requirement for a statement on

internal control to be prepared for the year ending 31 March 2002, in accordance with guidance to be issued by the Treasury.

Speke Garston Developments Limited have carried out a review of corporate governance and have taken the decision to form an audit committee. Following the publication of the Turnbull report consideration has been given to the internal risk management framework.

ยก 75)


11 Statement on the Agency's policy for conserving energy, reducing waste & .

minimising the release of greenhouse gases The Agency is committed to energy conservation, waste reduction and minimising the release of greenhouse gases. .

Sustainability is a key cross cutting theme within the Regional Strategy. The Agency is a funding contributor to Sustainability North West, a multi-sectoral partnership, and is represented on its Board. A close working relationship is being forged.

In 2001/02, the Agency will address in detail how its own operations can contribute to the sustainability agenda. Issues such as the efficiency of the Agency's Corporate Headquarters

building and Area Offices, procurement policy, the use of ICT to reduce staff travelling between offices, home working etc are all being reviewed.

~ Chief Executive / Accounting Officer

~~.., ; Mp.ÂŁckf'A. Chairman

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11GROUP INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR TO 31 MARCH 2001

Notes

2001

£000

As restated 2000 £000

Income Grant-in-Aid

2

Transfer from government grant reserve Other government grants

3

157,225 279 1,753

Clawback of grant and contributions

127

European funding

3,496

4

Proceeds from disposal of Development assets

1,661

Proceeds from disposal of Investment assets

5,935

Proceeds from disposal of Operating assets

144,772 247 7,259 1,304 1,177 10,250 3,683

18

Rents and maintenance charges

Other income

TOTAL INCOME

11,160 3,114 184,768

11,235 954 180,881

Expenditure Book value of investment assets sold

11

5,961

2,305

Book value of development assets sold

13

1,348

8,771

Book value of operating assets sold

10

18

Bad debts and movements in provision for bad

and doubtful debts Development assets written down

13

Environmental Provisions

16

Salaries and wages

6

Other administrative costs

7

Grants paid for programme expenditure

Grants paid for revenue expenditure.. Grants paid for coalfield expenditure

2

20

Write back of loan '

TOTAL EXPENDITURE

237 8,770 350 7,742 10,633 72,749 79,486 477

293 3,206

6,317 8,876 73,724 72,522 881

(3,750) 184,021

176,895

747

3,986

435

529

Operating Surplus

Interest receivable 5 Provisions against investments in associated unçlertakings 12

(1,207)

Notional cost of capital 8

(7,075)

(6,952)

(Deficit) for the period on ordinary activities

(5,893)

(3,644)

2,707

(6,531)

(3,186)

(10,175)

7,075

6,952

Taxation

9

(Deficit) for the period after tax

Reversal of notional cost of capital

-SUrplus7(DêlicitFfofthêperiödcaffiedförwàfd .~

-3-;889-....

.. - ---l3~223)

The 1999-2000 figures have been restated as the accounting policies concerning the treatment of grantin-aid and revaluation of assets have been changed as a result of a new Accounts Direction issued by

the Secretary of Statß. Details of the changes are set out in pages 109 to 113. The notes on pages 84 to 108 form part of these accounts. All activities are from continuing operations. 179 J


11 STATEMENT OF TOTAL

RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED

31 MARCH 2001

£000

As restated 2000 £000

Surplus/(Deficit) for period carried forward

3,889

(3,223)

Revaluation on investment assets

2,980 184

2,017 5,425

1,170

(1,651)

8,223

2,568

2001

Revaluation on development assets

Grant in Aid payable/(receivable) not released to the

Income and Expenditure Account

TOTAL

GAINS

The prior year adjustment in note 26 does not affect the above prior year figures.

¡ 80 J

1


APPROVED BY THE BOARD ON 13TH JULY 2001

~

~.-.~1 Ji"-L.Jf'J. Chairman

Chief Executive! Accounting Officer

The notes on pages 84 to 108 form part of these accounts

r81 J


11BALANCE SHEET AS AT 31 MARCH 2001 .

As restated 2000 £'000

Notes

2001 £'000

Tangible operating assets

10

Investment assets

11

2,169 90,270

Investment in subsidiary undertakings

12

1,892 91,768 5,825

92,439

.99,485

16,165 9,766 2,655 28,586

13,246 11,763 1,865 26,874

(7,498)

(5,413)

21,088

21,461

(702)

(5,474)

112,825

115,472

18

(1,861)

2,665

17

114,429 257 112,825

112,731 76

FIXED ASSETS

CURRENT ASSETS Stock of development assets

13

Debtors

14

Cash at bank and in hand

21

CREDITORS: Amounts falling due within one year

15

NET CURRENT ASSETS

PROVISIONS FOR LIABILITIES AND CHARGES

16

TOTAL ASSETS LESS TOTAL LIABILITIES

RESERVES Income and Expenditure Reserve Government Grant Reserve Other Reserves

19

115,472

APPROVED BY THE BOARD ON 13TH JULY 2001

~

4(~.~ 0$ fotuAAflA. Chairman

Chief Executive! Accounting

The notes on pages 84 to 108 form part of these accounts

182 J

Officer


11 GROUP CASH

FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2001

Reconcilation of operating surplus to net cash inflow from operating activities

Notes

2001 ÂŁ'000

As restated 2000 ÂŁ'000

OPERATING ACTIVITIES

747 279 350 2,837 454

Surplus on operating activities Depreciation charges Environmental liabilities provision

Decrease/(Increase) in debtors

Increase in creditors and provisions

Depreciation released from government grant reserve Profit on sale of development and investment assets

Write down of loan stock

3,986 247 (4,800)

1,805

(297)

(247)

(287)

(471)

(3,750)

Write down of development assets .

8,770

Net Cash Inflow From Operating Activities

9,103

520

9;103

520

435

529

(2,137)

(9)

(13,015)

(14,930)

7,614

11,547

155

168

2,155

(2,175)

(1,390)

4,074

765

1,899

CASH

FLOW STATEMENT

Net Cash Inflow from Operating Activities Returns on Investments and Servicing of Finance Interest Received

Taxation Capital Expenditure & Financial Investment Purchase of Fixed Operating, Development and Investment Assets

Proceeds on disposal of Fixed Operating, Development & Investment Assets

Acquisition Cash Transfer (outflow) from other organisations

Cash Inflow before financing Financing for investment development

and operating assets

Increase in Cash

21

183 J


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

1 ACCOUNTING POLICIES

(1) Basis of Accounting The financial statements of the Northwest Development Agency have been prepared in a form directed by the Secretary of State for the Environment, Transport and the Regions, 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 in note 1 (2) below. (2) Basis of Consolidation

No separate income and expenditure account is presented for the Agency as provided by Section 230 of the Companies Act 1985.

The consolidated accounts incorporate the accounts of the Agency and its subsidiary undertaking Speke Garston Developments Limited.

(3) Fixed assets - Investment Assets The portfolio of industrial and commercial investment properties held at anyone 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 and 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 realised deficit, as originally charged, by revaluation adjwstment, to the Income and Expenditure Account. eliminating the overall accumulated un

Valuations are carried out in accordance with best practice as contained in the Statement of Asset Valuation Practice and Guidance Notes (3rd Edition) published by the Royal Institute of Chartered Surveyors.

A valuation of the whole portfolio was carried out as at 31 March 2001, which was undertaken by King Sturge, International Property Consultants. 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.

184 J


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

1 ACCOUNTING POLICIES (CONTINUED) (4) Fixed Assets - Other Tangible Assets

. Tangible Fixed Assets are valued at depreciated replacement cost. (5) Development Assets

Development assets, consisting of land and buildings, are shown at the lower of current replacement cost and net realisable value, any reductions inholding value being written off to the Income and Expenditure Account.

Acquisitions and disposals of development assets are accounted for on the date of legal

completion. (6) Depreciation

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

anticipated useful

Owned property Leasehold buildings with less than 25 years to run Office furniture, fittings and equipment

Computer equipment

50 years

Period of lease 5 years 3 years

(7) Investments and Long Term Loans

Investments and loans are shown net of provision for amounts considered doubtful and of writeoffs 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 DETR is obtained for any write-off in excess ofÂŁ25,000. 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 present value of estimated future rental income. Expenditure on these projects is written off in the year of spend. (8) Pension Costs

Certain of the employees of Northwest Development Agency participate in The English Partnerships Pension Scheme (EPPS), the Principal Civil Service Pension Scheme (the PCSPS) and individual defined contribution pension plans. The EPPS and PCSPS are defined benefits schemes. The PCSPS is a non-contributory scheme. The Agency's contributions to the Schemes are charged to the Income and Expenditure Account so as to spread the cost of pensions over the employees' working lives within the Northwest Development Agency.

The

Board Members are not members of these or any other pension scheme of the Agency, with the exception of the Chairman whois a member of the PCSPS.

185 J


NOTES TO THE

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED) (9) Government Grants NorthwestDevelopment Agency's activities are

funded

primarily bygrantinaid provided by

the

Department of the Environment, Transport and the Regions for specified types of expenditure. Government grants receivable of a revenue nature are credited to the Income and Expenditure

Account in the year to which they relate. Government Grants in respect of capital expenditure on assets that are depreciated are credited to the Government Grant Reserve and released to the life of the relevant Tangible Fixed Assets. Government Grants in respect of assets that are retained and not depreciated are Income and Expenditure Account over the expected useful

credited to the Government Grant Reserve. Grant in aid released to the Income and Expenditure account includes amounts attributable to expense accruals for which grant will be received during the year 2000/2001 to finance payment.

(10)" Deferred Taxation Full provision has been made for deferred tax assets and liabilities arising from timing differences between the recognition of gains and losses in the financial statement and their recognition in the tax computation.

(11) Foreign Currency Transactions Transactions in foreign currencies are recorded in sterling at the rates prevailing at the Balance Sheet date. Resulting exchange gains and losses are taken to the Income and Expenditure

Account. (12) Leases Operating lease rentals are charged to the Income and Expenditure Account over the period of the lease.

There are no finance leases.

(13) New Accounts Direction The Agency was issued with a new Accounts Direction on 30th March 2001. The changes implemented have resulted in prior year adjustments, which are discussed in note 26.

1861


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED) 2 GRANT IN AID RELEASED Grant in aidis funded from the Department of the Environment, Transport and the Regions, Class ILL,

Vote 1, with the Department of Trade and Industry, Class lX, Vote 1 funding expenditure on the Regional

Supply Office.

Grant-in-Aid received from DETR

Add loan interest deducted at source Grant-in-Aid received from DTI

Opening 1999-2000 Grant-in-Aid debtor Closing 1999-2000 Grant-in-Aid debtor Opening 2000-2001 Grant-in-Aid debtor

Closing 2000-2001 Grant-in-Aid debtor

Total Grant-in-Aid Receivable Grant in Aid utilised in the year Vote

A

Vote B

Land and Property Single Regeneration Budget

VoteC

Rural Development

Vote D

Skills Development

Vote E

Vote G, H

Competitive Development Administration Expenditure

Vote J

Inward Investment Activity

Vote K

Regional Supply Office

Corporation Tax

Total relevant expenditure

20,599 126,892 1,687 . 7,071 1,638 13,344 1,917 542 2,358

16,624 129,113 1,183 4,780 269 11,507 1,740 555 1,572

176,048

167,343

176,048

1,888 169,231

Grant in Aid utilised in respect of predecessor'organisations

Receipts Capital Receipts ..Revenue-Receipts.

(7,157) (13,052)

-(i么, 搂么6)-----~(i~l;搂32)-------

(248) (82)

European Funding

Other Income

(1,682) (1,044)

Total Grant-in-Aid Receivable

156,055

143,121

Grant-in-Aid applied to capital expenditure

~~-c-.~~Grant=in=Aid-applied-to-fixed~operatingcassetsc-----

..._--.~----(571)-~-------(232)-~--

4,477 (4,242)

Grant-in-Aid applied to investment assets

Grant-in-Aid applied to development assets

(2,736) 6,125

Grant-in-Aid Credited to Income and Expenditure Account

187 J

157,225

144,772


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED) 2 GRANT I.N AID RELEASED (CONTINUED)

Rural Loan Interest generated from the Rural Loans portfolio, was received throughout the year. The total amount of interest received was repaid to the Department of the Environment Transport and the Regions

by direct deduction from the final claim for Grant-in-aid.

COALFIELDS During the year, grant was received from English Partnerships for the Coalfields Programme as follows:

2001

£000 302

Opening 2000/2001 Coalfield Creditor

114 42

Grant received

Closing 2000/01 Coalfield Debtor/(Creditor)

Grant released

458 477

Expenditure on coalfields

Capital Receipts-European Funding

2000 £000 996 (302)

694 881 (180)

Other Grant Released

3 OTHER GRANTS Grant for coalfield expenditure

Other

(19)

(7)

458

694

2001

£000

2000 £000

458 1,295 1,753

694 6,565 7,259

2001

£000

2000 £000

3,496 3,496

180 997 1,177

4 EUROPEAN FUNDING European Regional Development Fund

-received for coalfields

-other

2001

£000

2000 £000

4a OTHER INCOME 1,200 1,300 554 60

Inward Investment

Speke Garston Developments Limited

Contributions to Direct Development projects Miscellaneous Income

--o~=:c-o-o_~__=':-'~"__,_~7' . .....0 . o7°-r;l,.:~14-o--.o-

2001 5 INTEREST RECEIVABLE Bank deposit 188 J

901

53

__O____~,-,- 0 954:-~~-~~

£000

2000 £000

435

529


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED) 6 SALARIES AND WAGES

£000

2000 £000

139

147

7

11

2001

6 (a) Board Members Board members Fees Pension costs

Social Security costs

9

12

155

170

5,698

4,677 532 397 5,606

Staff Salaries and wages inc. overtime

Pension costs

641

489 6,828

Social Security costs

Agency Staff Seconded staff salary costs

Total Salaries & Wages

524 235 759

452 89

7,742

6,317

541

6 (b) Emoluments of Board Members The emoluments of Board Members were:

Name

Date of Appointment

Salary

Real

Total Pension

2001

Increase

2001

Salary 2000

£

£

accrued in pension pension at

£

£

31/03/01 £

Lord Thomas of

Macclesfield 14 December 1998 45,276 415 Mike Doyle 14 December 1998 14,406 Maggie Chadwick 14 December 19987,203 John Dunning 14 December 1998 7,203

Felicity Goodey 14 December 1998 7,203 Clive Jeanes 14 December 1998 7,203 Richard Leese 14 December 1998 7,203

Alan Manning 14 December 1998 7,203 Dennis Mendoros 14 December 1998 7,203 .---:~.--....~KatAeBeaEle.~--~-=..d~4-8eeeml3er-1.998~.~.-7,203.~-.~Fred Ridley 14 December 1998 7,203 Judy Robinson 14 December 1998 7,203

James Ross 14 December 1998 7,203 All Board Members have been appointed on a fixed term of three years. ¡ 89 J

1,273 7,470 53,167 16,450 7,000 7,000 7,000 7,000 7,000 7,000 7,000 ---~- .......------~7,OOO--.-..

7,000 7,000 7,000


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED) Board members are contracted to carry out two days work per month on behalf of the Agency. The 1 day per week. No Board Members are eligible for pension contributions, performance related payor any other taxable

Chairman is contracted for 2 days per week and the Deputy Chairman is contracted for

benefit as a result of employment with the Agency, with the exception of the Chairman who is a member of the Principal Civil Service Pension Scheme.

6 (c) Emoluments of Chief Executive and the most senior managers

Age

Salary Benefits

for relevant period

2001

Total

2000 Total

Real

Total

increase

accrued pension at

in pension at

60 at 31/3/01

60

£

£

£

£

£

£

58

100,914

-

100,914

89,616

1,136

2,569

51

51,687

632

52,319

29,575

657

1,032

55

72,281

12,647

84,928

79,817 Private Money Purchase

Michael Shields Chief Executive Appointed 14-12-98

Steve Ashcroft Director

of

Corporate Services Appointed 01-09-99 John Burrows OBE Director

of

Business Development Appointed 01-04-99

Defined Contribution Scheme

Or Baron Isherwood

Director of Regeneration Appointed 01-1 0-99

56

72,362

3,944

76,306

36,063

1,172 23,317

50

51,687

5,501

57,188

32,726

663 1,063

Peter Mearns Director of Marketing Appointed 16-08-99

Geoff Parker

Director of Finance Appointed 19-07-99

47 72,362

4,899 77,261 51,146

922

1,554

72,362

4,003 76,365. 52,873

921

1,527

Dr Peter White

~--~-~~~c.----Director.of-Rolicy~---_..~& Intelligence

Appointed 01-08-99

51

190 J


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

This is a statutory

Pension benefits are provided through the Principal Civil Service Pension Scheme. sCheme that

provides benefits on a fina.i salary basis at a norma.i retirement age of 60. Benefits accrue at

the rate of 1/8Oth of pensionable salary for each year of service. In addition a lump sum equivalent to 3

years pension is payable on retirement. Members pay contributions of 1%% of pensionable earnings. Pensions increase in payment in line with the Retail Price Index. 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

and also provides a service enhancement on computing the spouse's pension. The enhancement depends on length of service and cannot exceed 10 years. sum benefit of twice pensionable pay

The Chief Executive and Senior Management have given their consent to show their pension benefit

details, but the pensions benefit details of John Burrows are not available to the Agency at this time. 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.

Benefits include cars, fuel and private medical insurance. The Chief Executive's salary includes a bonus payment of £8,878 relating to the perioçJ 1 st April 1999 to 31st March 2000.

SALARIES AND WAGES 6 (d) Staffing Numbers The average number of staff employed by the Agency during the year (including all agency and seconded

staff was 237. 2001

2000

Chief Executive's Office

6

Corporate Services

5

6 6 43

Business Development

44 100

Regeneration Marketing Finance Policy & Intelligence

11

13

41

37 22 10

19

Overseas

3

Speke Garston Development Company

8

Total

237

~._-----------"---------'-~'-:---~-------._;-------:--------;.-._------------_._---------- ----_._-------------------

! 91 J

81

218

--:---------.---:-:~-~~.~~~~.:---.-.------,-----...---


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

6 (e) Pension Arrangements The Agency has a number of pension schemes in operation. The principal schemes are of the

contributory defined benefit type.

Principal Civil Service Pension Scheme (PCSPS) Pension benefits are provided through the Principal Civil Service Pension Scheme. This is a statutory

scheme that provides benefits on a final salary basis at a normal retirement age of 60. Benefits accrue at the rate of 1/8Oth of pensionable salary for each year of service. In addition a lump sum equivalent to 3

years pension is payable on retirement. Members pay contributions of 1%% of pensionable earnings. Pensions increase in payment in line with the Retail Price Index. 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.

The PCSPS is a non-contributory scheme. For 2000-2001 contributions of £399,157 (1999-2000£230,676) were paid to the Paymaster General at rates determined from time to time by the Government

Actuary and advised by The Treasury. The rate for 2000-2001 is inthe range of 12 to 18.5% of pensionable salary. (1999-2000: 12%-18.5%).

English Partnerships Pension Fund Former employees of English Partnerships participate in the English Partnerships Pension Scheme,

which provides benefits based on final pensionable salary. Contributions of £166,080 (2000: £272,022) were paid to English Partnerships pension fund at rates determined by the pension funqs actuary. The

rate for 2000-2001 was 15% to the 30 June 2000 and 9% thereafter (1999-2000 - 15%). The Scheme is set up under trust and the assets of the Scheme are,therefore, held separately from those of English

Partnerships. The pension cost charged to the Income and Expenditure Account is calculated by the actuary so as to spread the cost of pensions over the employees' working lives with English Partnerships. The pension

costs are based on the most recent actuarial valuation which was completed with an effective date of 31

March 1999. The actuarial method used was the Projected Unit Method. The most significant assumptions for their effect on the pension costs are those relating to the rate of return on the

investments of the Scheme and the amount by which this exceeds increases in salaries and pensions and the rate of equity dividend increase adopted in valuing the Scheme's investments. The investment return used was 6% per annum. It has been assumed that this will exceed the rate of salary increase by

1.5% per annum, the rate of pension increase by 3% per annum and the rate of growth of equity

dividends by 5% per annum.

r 92 J


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED) The actuarial valuation at 31 March 1999 showed that the market value of the Scheme's assets was £70,052,137 and the .actuarial value of the assets represented 125% of the liabilty for benefits,

calculated using the same actuarial method and assumptions that were used to calculate the pension cost charged to the Income and Expenditure Account. The accounts of the English Partnerships Pension Scheme are available from the Secretary, at St George's House, Kingsway, Team Valley, Gateshead, NE11 ONA. All employees are issued with a

summary of the accounts.

The Greater Manchester Superannuation Fund Contributions of £2,177 (1999-2000: £5,322) were paid to the Greater Manchester Superannuation Fund. The rate for 2000/01 as determined by the fund's actuary was 9% of pensionable salary. The latest actual assessment of this scheme was in 1998.

Other Schemes The three minority schemes covering up to 17% of the Agency's staff are of the defined contribution type

held in independently administered funds. The rate for 2000/01 was 9% of pensionable salary. Contributions of £81 ,321 (2000: £18,286) were paid to Inward Group Money Purchase Plan, Scottish Mutual Assurance Plc Group Personal Pension Plan, CGU Life Personal Pension Plan, and Merseyside Pension Fund.

6 (1) Seconded Staff Staff were seconded from the following organisations to the Agency during the accounting period.

2000

2001 No. of

staff

Organisation Liverpool City Council

1

Chamber Business Enterprise

1

DERA

1

Manchester Biotech Limited

1

North West Chemical Initiative

2

Old

ham Metropolitan Borough Council

Cost

No. of

Cost

£000

staff

£000

20 40 34 43 45

19

4

1

1

1

Stockport and High Peak TEC

1

11

1

South Wirral Health Authority

1

37

Eden Biopharm

1

4

Barclays Bank

1

1

Turner & Townsend

1

Manchester City Council

1

Manchester TEC

..--.- -.Tetai-~-----.-c-'--

1

----~-_.__.-

-_.~.._---"-". ------_. --------

-...1'1

------------------ _.__._---

¡ 93 J

~-2a5-.

...~8

10 17

10

10

19

89


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

7 OTHER ADMINISTRATION COSTS

2001 2000 £'000 £'000 Travel & Subsistence

601

Other staff costs

542 1,490 2,173 1,510 1,922 1,228 279 68

Office costs Estate Management

Marketing and PR Professional costs

, IT and communication

Depreciation Auditors' remuneration Operating lease rentals

404 257 819 2,295 1,546 1,333 1,291

(21)

247 67 397 220

10,633

8,876

841

Other accountancy services

8 NOTIONAL COST OF CAPITAL When calculating the surplus or deficit for the year, the Agency is required to include as expenditure,

a notional cost of capital, to the extent that there is no real charge for this. This has been calculated as 6% of the average of total assets less total

liabilities. After the surplus or deficit for the year there

is an entry reversing this amount.

9 TAXTION

2001 2000 £'000 £'000 Corporation tax on profits for the year at 30% Deferred tax provision

2,358 (5,065) (2,107)

194 J

1,572 4,959 6,531


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

replacement cost of the assets.

195 J


11NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

11

INVESTMENT ASSETS

Group 2000 £'000

2001 £'000 At 1 April 2000

91,768

Agency 2000

2001 £'000

£'000

91,768

Transferred out of predecessor organisations at 1 April 2000 Additions in year

Disposals Surplus on Revaluation

1,483 93,251

86,104 6,547

86,104 6,547

92,651

1,483 93,251

92,651

(5,961)

(2,305)

(5,961)

(2,305)

2,980

2,017

2,980

2,017

90,270

91,768

Transfer to Properties occupied by Agency

(595)

Valuation At 31 March 2001

(595)

90,270

91,768

12 INVESTMENTS

SUBSIDIARY UNDERTAKINGS

Group

Agency

£'000

£'000

Loan 2000 Amounts written down in the year

5,825

1 April

(5,825)

31 March 2001

Name 01 Undertaking

Interest

Class 01 Shares

Nature 01 Business

Speke Garston Developments Ltd

80.1%

Ordinary Shares

Development of

10p

Speke Garston, Liverpool

The Estuary Management Company 80.1 %

Provision of services at

Limited (A subsidiary of Speke Garston

the Estuary Commerce Park

Developments Limited) (Limited by guarantee)

The Net Assets and financial results of The Estuary Management Company are not material to the Group.

196 J


11 NOTES TO THE

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED) The loan was issued on 10 July 1996. It is unsecured and no interest is receivable unless written notice is

issued from either stockholder with the other's agreement. No notice has beenissLJéd to date. The loan is repayable on 25 April 2003 in accordance with a shareholders' agreement unless certain changes in the shareholdings trigger an earlier redemption.

Under the terms of the agreement governing repayment of the loan, no amounts are repayable until the

amounts owed from the subsidiary und~rtaking, in respect of the payments received subject to clawback, have been satisfied in fulL. It is therefore anticipated that the loan will be repayable for a

nominal amount of £1 . Accordingly the loan has been written down to reflect the anticipated repayable

amount.

The amount due to the minority shareholder has been written down in full (Note 20).

ASSOCIATED UNDERTAKINGS AND JOINT VENTURES

Share of net assets 1 April 2000

Group

Agency

£'000

£'000 1,207

Disposal of Investment in Whitehaven

Development Company Limited

(679)

At 31 March 2001

528

Provision

(1,207)

At 1 April 2000 679

Movement in provisions

(528)

Share of net assets at 31 March 2001 Share of net assets at 31 March 2000

¡ 97 J


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED)

Name of Undertaking

Interest

Class of Shares

Nature of Business

20.4%

Ordinary

Management of

Associated Undertaking

Maryport Developments Limited

Maryport Harbour 101

Redeemable preference shares

37.5%

Ordinary

Whitehaven Development

Company Limited

Development of

Whitehaven Harbour The investment in Maryport Development Limited was provided for in full in 1999/2000 to reflect the

Northwest Development Agency's intention tq withdraw from this investment on 31 st March 2003. During the year, the Board transferred the Investment in Whitehaven Development Company Limited at

nil consideration to W3M a charitable foundation.

Name of Undertaking

Interest

Class of Shares

Nature of Business

Joint Ventures New East Manchester Limited (Limited by Guarantee)

331/3 %

Regeneration of East Manchester

331/3 %

Regeneration of Liverpool

Liverpool Vision Limited

(Limited by Guarantee)

The Net Assets and financial results of each of the above undertakings are not material to the Agency, or

the Group.

198 J


NOTES TO THE

2001

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH

(CONTINUED) 13 DEVELOPMENT ASSETS

Group 2001 £'000 At 1 April 2000

2000 £'000

24,746

Agency

2001 2000 £'000 £'000 13,246

Transferred out of predecessor organisations at 1 April 20.00

Additions in year

27,221 4,077 5,425

2,864 184 16,294

13,946 487 5,425 19,858

10,953 184 35,883

36,723

Amounts written down

(8,770)

(3,206)

Disposals

(1,348)

(8,771)

(129) (6,612)

Valuation at 31 March 2001

25,765

24,746

16,165 13,246

Surplus on revaluation for the year

¡ 99 J


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED) The amounts due from the subsidiary undertaking represents payments received subject to clawback termination of the shareholders agreement the amount repayable is limited to the company's total net assets on 25 April 2003 after first providing for any ERDF clawback and have no fixed repayment date. On

due and termination costs and actual and contingent liabilities at that date. Following consultation with the subsidiary undertaking, a review of the budgets and business plans to 25

April 2003 has been undertaken, and the directors are of the opinion that it is unlikely that the amount

repayable will exceed £4.3m. Accordingly the amounts owed have been written down to reflect the

anticipated repayable amount.

15

CREDITORS: Amounts fallng due within one year

Group

. Trade creditors Rural loan interest due to DETR

2000 £'000

3,656

Deferred Income

Accruals

1100 J

2001 2000 £'000 £'000

861

3,112 861

22

10

22 10

286 1,788 2,578 110 8,440

302 1,967 1,567 2,157 1,183 8,047

Grant for coalfield expenditure

. Other creditors Corporation tax

Agency

2001 £'000

302

286 1,788 2,180 110 7;498

381

1,567 2,157 135

5,413


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED) 16 PROVISIONS FOR LIABILITIES AND CHARGES

Group 2000 £'000

2001 £'000

Environmental Liability Provision for year 31 March 2001

Agency 2001 2000 £'000

350 350

350 350

515

515

Dilapidations At 1 April 2000 Transferred from predecessor

256 259 515

organisations 1 April 1999 Provided during year 31 March

(57)

458

2001

Deferred Tax At 1 April 2000

31 March 2001

Total Provisions

for Liabilties and Charges

--

256 259 515

4,959

4,959

Provision for year

(57)

458

£'000

(5,065)

4,959

(5,065)

4,959

(106)

4,959

(106)

4,959

702

5,474

702

5,474

The provision for environmental liabilities represent liabilities for cost on specific sites which currently have

no market value. The major components of the provision for deferred taxation which has been fully provided at a

corporation tax rate of 30% are as follows:

Group

2001 2000 £'000 £'000

(106)

2000 £'000 4,959

(106)

4,959

(106)

2001 £'000 Accelerated capital allowances

Agency

(106) 4,959

Pension fund prepayment and other

timing differences

1101 J

= 4,959


11 NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2001

(CONTINUED)

17 GOVERNMENT GRANT RESERVE

Group

Agency As

As

Restated

Restated

2000 £'000

2001 £'000

2001 £'000

2000 £'000

Transferred from predecessor organisations 1 April 2000 Fair Value Adjustments Development Assets

\.

Reclassification to operating assets

'v

'- 106,176

At 1 April 2000

Additions Investment Assets Development Assets Operating Assets

, -106,906 "

'-

1,483 -- 2,864 '579

111,990

(2,779) (852) ,~

\.

\.

(2,779) (852)

24

112,731

,24

5,952 487 827

1,483 2,864

5,952 487 827

571

Disposals Investment Assets Development Assets Operating Assets Amounts released to Income

L"..

- (5,961)

(129)

(2,305) (6,612) -:--

(18)

and Expenditure Account

(5,961) (129)

(2,305) (6,612)

(18)

(279)

(247)

(276)

(236)

2,980

2,017 5,425

2,980 184

2,017 5,425

114,429

112,731

Revaluations Investment Assets Development Assets

184

Provision against investment in associates

(1,207)

108,609

¡ 102 J

106,906

(1,207)


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

18 INCOME AND EXPENDITURE RESERVE

Agency

Group

2001 2000

2001 £'000

2000 £'000

£'000 £'000

6,303

8,369

2,665

(1,606)

(25)

1,207 108

(25)

1,207 108

Subsidiary Undertaking

(227)

(158)

Surplus/(Deficit) for year

3,889 9,940

(3,223)

(4,501)

6,303

(1,861)

Transferred from predecessor organisations 1 April 2000 Provisions against investment in associated

undertakings transferred from government grant reserve Other reserve release

Balance at 31 March 2001

2,956 2,665

19 OTHER RESERVES

Agency

Group 2000 £'000

2001 £'000 76

Balance at 1 April 2000

2001 2000 £'000 ' £'000

76

Transferred from predecessor organisations at 1 April

2000

Transferred from other organisation

29 155

29 155

181 (108)

Movement in year

181

(108)

Balance at 31 March 2001

257

76

257 76

2000 £'000 3,750

2001 2000

20 LOANS: Amounts repayable after more than one year

Group 2001 £'000

3,750

Loan Stock

Amounts written down in year

(3,750)

3,750

1103)

Agency

£'000 £'000


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED) The loan stock was issued on 10th July 1996 by the Agency's subsidiary Speke Garston Developments Limited. It is unsecured and no

interest is payable unless written notice is

received from the stockholder

with the Agency's agreement. No notice has been received to date. The loan stock is redeemable on 25th April 2003 in accordance with a shareholders' agreement unless certain changes in the shareholding trigger earlier redemption.

Under the terms of the agreement governing repayment of the loan stock, no amounts will be repayable

until the amounts due to ourselves, in respect of grants received and subject to c1awback, have been satisfied

in fulL. It is therefore anticipated that the loan stock will be repayable for a nominal amount of £1 .

Accordingly the loan stock has been written down in full to reflect the anticipated repayable amount. This

treatment has been agreed with the third party who is entitled to repayment.

21 ANALYSIS OF CHANGES IN CASH AND CASH EQUIVALENTS DURING THE YEAR

2000 £000

2001

£000 Cash at bank and in hand at 31 March 2000

1,900 765 2,665

Net cash inflow

Cash at bank and in hand at 31 March 2001

1

1,899 1,900

22 OPERATING LEASES As at 31 March 2001 the Agency had annual commitments under operating leases as follows:

2000

2001

Buildings £'000

Others

Buildings Others

£'000

£'000 £'000

287 103 390

94 146

Leases expiring:

- within one year

- between one and five years

240

316 289 605

57 181

238

Rental costs of operating leases are charged to the Income and Expenditure Account on a straight line

basis over the term of the lease.

1104 J


11 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

23 CONTINGENT LIABILITIES At 31 March 2001 there were no significant contingent liabilities (2000 nil).

24 COMMITMENTS 2001 £'000

2000 £'000

562,648

444,848

Expenditure authorised by tHe Board and contracted for

At 31 March amounted to:

All commitments relate to programme expenditure in relation to the Land & Property Programme, Single Regeneration Budget,

Skills Development Fund, Rural Programmes and the Regional

Innovation Fund.

25 POST BALANCE SHEET EVENTS With effect from 1 st April 2001 the Agency has inherited further financial responsibilities for the Partnership Investment Programme from English Partnerships. Additional assets and liabilities were to make an estimate of the financial value of these transfers. Net assets transferred will be brought into account during 2001/02. transferred to the Agency on that date. It is not possible at this time

Under the machinery of Government changes announced by the Government on 8th June 2001, responsibility for the sponsorship of the Agency was transferred from the Department of the Environment, Transport and Regions to the Department of Trade and Industry.

26 NEW ACCOUNTS DIRECTION The Agency was issued with a revised Accounts Direction by the Secretary of State on 30th March 2001 . The Accounts Óirection requires that grant-in-aid received by the Agency as a contribution towards' expenditure on all fixed assets should be credited to a government grant reserve. The previous policy was to credit the deferred government grant reserve account, while grant received to fund investment and development assets was credited to the grant-in-aid reserve. When fixed assets financed by grant-in-aid are revalued, the amount of the revaluation is now credited

to the government grant reserve. Formerly, such revaluations would have been credited to the revaluation reserve.

A further change introduced by the new Accounts Direction is that the balance sheet should be struck at total assets less all liabilities rather than at total assets less current liabilities. This has a consequential

impact on the Income and Expenditure Account as the calculation of the notional cost of capital is based .- onthis_balance._The 1999-2000riotionalcostofcapitô.lbeforerestatement was £7,122.

¡ 105 J


I.. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2001 (CONTINUED)

27 RELATED PARTY

TRANSACTIONS

The Northwest Development Agency is a Non-Departmental Public Body sponsored by The Department of the Environment, Transport and the Regions (DETR). DETR is regarded as a related party with which,

during the year, Northwest Development Agency has had a significant number of material transactions.

In addition, the Northwest Development Agency has had a number of material transactions with other Government Departments and other central government bodies, including English Partnerships, the Department of Trade and Industry, the Ministry of Defence and various Local Authorities.

Board members took no part in the discussions or in the subsequent decisions by the Board on proposals which concern organisations that members have connections as reported on the register of

member's interests. During the year none of the Board members, key management staff or other related parties has

undertaken any material transactions with the Northwest Development Agency apart from those detailed on page 107.

1106 J


11 RELATED PARTY TRANSACTIONS Year ended 31st March 2001 Name

Connected part

Position

Total Value of

Nature of transaction

Transaction £

Mike Doyle Deputy

St Helens Metropolitan Borough Council

Councilor

9,087,741

Land & Property/Single Regeneration Grants

Sf Helens Chamber of Commerce

Director

30,400

Single Regeneration Grants

Fumess Enterprise Agency

Director

15,025

Contributions to operating costs

Fumess College

Chief Executive

116,258

Skils Development Fund grants

43,787

Business Development Projects/

Maggie Chadwick Board Member

(Resigned 31/8/00)

John Dunning

Board Member

Voluntary Action Cumbria

Vice President

Economic Regeneration Grants Business Link Cumbria

Board Member

76,250

Business Development Projects/ Economic Regeneration Grants

Felicity Goodey Board Member

Excellence North West

Clive Jeanes Board Member

Wig

Fred Riley Board Member

an Borough Partnership

7,476

Non-Executive Director

Contributions to operating costs

Non-Executive Chairman 105,053

£100,000 Grants-£5,053 -

Exceilence North West

Non-Executive Chairman

Contributions to operating costs Consultancy services provided

Manchester Metropolitan University

Deputy Chairman of Governors

Stockport. Metropolitan Borough Council

Councilor

7,476

34,513

£30,000 Grants-£4,513Contributions to operating costs

1,168,506

Single Regeneration Grants

Manchester Enterprises

James H Ross Board Member

Limited

Adviser / Observer

670,157

Single Regeneration Grants

Liverpool Vision

Director

480,000

Joint Venture Agreement

169,510

£100,748 Grants-£68,762-

Dennis G Mendoros Board Member North West Aerospace Alliance Chairman

Consultancy services provided

Northern Technologies

Director

185,161

£180,030 Grants-£5,131 Contributions to.operating costs

Bank of England

Panel member

The Pendle Partnership

Chairman

1,500,788

Manchester City Council

Councilor

19,738,045

7,500

Main Contract-Direct Development

Grants

Richard Leese Board Member

£19,549,171-Grants £188,990Project fees

Alan Manning Board Member

New East Manchester limited Director

100,000

Grants

Merseyside Special Investment Fund Partners Ltd Member

198,356

SRBGrants £189,119

Trade Union Congress

175,000

Skils Development Fund grants

Regional Secretary

Regional Venture Fund - £9,237,

Michael Shields

Chief Executive

Speke Garston Development

Company Limited

Director

Liverpool Vision

Director

480,000

Project Fees for Direct Development

New East Manchester Limited Director

100,000

Grants

. -."- --~ '-. -_. "--,..,

John

Burrows

Director

Excellence North West

Director

7,476

Limited

Director

719,451

Sustalnabilty North West

Director

Contributions to operating costs

Baron Isherwood Director Peter

Maryport Developments Grants

White

Director

75,550 '

r 107 J

Contributions to operating costs


II~ 28 ANALYSIS OF TANGIBLE OPERATING, INVESTMENT AND DEVELOPMENT ASSETS TRANSFERRED IN FROM PREDECESSOR ORGANISATIONS TO THE AGENCY

Group Agency

Investment Dev. Tangible Investment Dev. Assets .

Tangible

Assets Propert . . Operating. ...

Propert . Operating .

Assets

Assets

English Partnerships Transferred from English

Partnerships at 1 April 1999 86,712 Fair Value Adjustment

15,973

339

92,537

(2,779)

Reclassification of Assets (852)

15,973

328

(2,779)

852

(852)

13,194

1,191

91,685

13,194

1,180

1,216

16

235

1,216

16

1,216

(1,216)

852

Adjusted Balance transferred

to NWDA at 1 April 1999 85,860 Rural Development Commission Transferred from RDC

at 1 April 1999 235 Fair Value Adjustment

Reclassification of Assets 1,216

(1,216)

Adjusted Balance transferred

to NWDA at 1 April 1999 1,451

16

1,451

16

Inward Transferred from Inward

at 1 April 1999

81

81

81

81

Fair Value Adjustment Reclassification of Assets

Adjusted Balance transferred to NWDA at 1 April 1999

Coalfields Assets Transferred from English Partnerships at 1 April 1999

752

752

Fair Value Adjustment Adjusted Balance transferred tb NWDA at 1 April 1999

752

752

Total Transferred from predecessor organisations

at 1 April 1999 Fair Value Adjustments Reclassification of Assets

.~c..Adjuste.d.E3alanรงe.~... transferred to NWDA at 1 April 1999

86,947

17,941

436

92,772

17,941

425

852 ...,288..

364

(2,779) (1,216)

852

(2,779)

364 .....81,3,11.

(1,216)

...13,946-~

1108 J

-93,136 .--c:1~,946

-1,2n~ .


11

Annex 2

Northwest Development Agency ACCOUNTS DIRECTION GIVEN BY THE SECRETARY OF STATE WITH THE CONSENT OF THE TREASURY, IN ACCORDANCE WITH SECTION 14(2) OF THE REGIONAL DEVELOPMENT

AGENCIES ACT 1998 1. The annual accounts of the Northwest Development Agency Regional Development Agency (hereafter in this accounts direction referred to as "the Agency") shall give a true and fair view of the income and expenditure and cash flows for the year and the state of affairs at the year end. Subject

to this requirement, the annual accounts shall be prepared in accordance with:(a) the accounting and disclosure requirements given in Government Accounting and in the Treasury guidance Executive Non-Departmental Pu~/ic Bodies Annual Reports and Accounts Guidance (issued July 2000), as amended or augmented from time to time, and subject to Schedule 1 to this direction;

(b) any other guidance that the Treasury may issue from time to time in respect of accounts that are required to give a true and fair view;

(c) any other specific disclosur~ requirements of the Secretary of State. insofar as these requirements are appropriate to the Agency and are in force forthe year for which

the accounts are prepared, and except where agreed otherwise with the Secretary of State and with the Treasury in which case the exception shall be described in the notes to the accounts. gives clarification of the application of the accounting and disclosure requirements of the Companies Act 1985 and accounting standards and also gives any exceptions to

2. Schedule 1 to this direction

standard Treasury requirements. Additional disclosure requirements of the Secretary of State are set

out in Schedule 2.

3. This direction shall be reproduced as an appendix to the annual accounts. 4. This direction replaces that dated 31 March 1999.

Signed by authority of the Secretary of State for the Environment, Transport and the Regions

Richard Allan

A grade 5 officer in the Department of the Environment,

Transport and the Regions Date: 30th March 2001

! 109 J


11--

Northwest. Development Agency DIRECTION TO THE ANNUAL ACCOUNTS

Schedule 1 1. Expenditure in the income and expenditure account shall include a notional cost of capital, at 6% of the average net assets during the year. This amount shall be reversed after the line showing the

surplus or deficit for the year. 2. Grants awarded by the Agency shall be included as expenditure in the income and expenditure account when there is a constructive obligation to pay the grant.

3. Stocks and work-in-progress shall be included in the balance sheet at the lower of estimated replacement cost and estimated net realisable value.

4. Government grants used to pay for fixed assets shall be credited to a grant reserve. This is different

from accounting standard SSAP4 which says that such grants should be credited to deferred income.

grant shall be taken to the grant reserve in the balance sheet. This is contrary to the Companies Act 1985 which requires such gains to be

5. Revaluation gains on fixed assets paid for from government

credited to the revaluation reserve.

6. On the disposal of a fixed asset paid for wholly by government grant, an amount equal to the profit or loss on disposal shall be transferred from the grant reserve to the income and expenditure account. Where government grant was only used to pay for part of the cost of the asset, the amount of this transfer shall be reduced in proportion. .These requirements are different from those in accounting

. standard FRS3 which says that an amount transferred to a reserve, other than from the income and

expenditure account, should not be recognised in subsequent income and expenditure accounts. 7. A provision shall be made for deferred tax in accordance with current accounting standards.

8. The foreword and balance sheet shall be signed and dated on behalf of the board members and by the accounting officer.

ยก 110 I


11

Northwest Development Agency DIRECTION TO THE ANNUAL ACCOUNTS

Schedule 2 ADDITIONAL DISCLOSURE REQUIREMENTS The following information shall be disclosed in the annual accounts, as a minimum, and in addition to the

information required to be disclosed by paragraphs 1 and 2 of this direction. 1. The foreword

A statement on the Agency's policy for conseNing energy, reducing waste and minimising the release of greenhouse gases.

2. The income and expenditure account or the notes thereto (a) the following income (i) grants

(ii) proceeds on the disposal of development properties (iii) proceeds on the dis'posal of fixed assets (iv) rents and maintenance charges receivable

(v) joint venture profits (b) the following expenditure -

(i) book value of development properties sold

(ii) movements in provisions for losses on development properties (iii) joint venture losses

(iv) debts written off and movements in provisions for bad and doubtful debts

3. The notes to the annual accounts (a) an analysis of grants from:

(i) the Department of the Environment, Transport and the Regions

(ii) European Community funds (iii) other sources

i 111 J


11

Northwest Development Agency DIRECTION TO THE ANNUAL ACCOUNTS (b) For grants from the Department of the Environment, Transport and the Regions the following

information shall also be shown:

(i) the amount that the Agency is entitled to receive for the year (ii) the amount received during the year (iii) the amount released to the income and expenditure account for the year

(iv) the amount used in the year to acquire or improve fixed assets (v) movements on amounts carried forward in the balance sheet under debtors, creditors, deferred income or deferred grant reserve

(c) an analysis of grants included as expenditure in the income and expenditure account and a statement of the total value of grant commitments not yet included in the income and expenditure

account; *(d) a report on the emoluments of the chief executive and of each individual board member and senior manager during the year (with separate disclosure where more than one person occupied an office). The report shall include full details of all elements in the remuneration package of each

person, such as fees, salary, annual bonuses, payment on termination of office, other taxable

benefits, pension contributions, and the performance related elements of these (for which the basis on which the performance is measured shall be explained). For each board member, the

report shall also show the time commitment in terms of days per month; *(e) if a board member, the chief executive or a senior manager has been appointed for a fixed term or is on a fixed-term service contract, the term shall be stated together with details of any

predetermined compensation on termination of office; *(f) a statement of the pension entitlements earned by the chief executive and by each individual board member and senior manager during the year, disclosed on a basis recommended for non-

departmental public bodies by the Treasury, or recommended for companies by the Faculty of Actuaries or the Institute of Actuaries;

(g) details of employees, other than board members, showing:(i) the average number of persons employed during the year, including part-time employees and secondees, analysed betw:en appropriateCcategories

(ii) the total amount of loans to employees

l112 J


11

Northwest Development Agency DIRECTION TO THE ANNUAL ACCOUNTS

(iii) employee costs during the year, showing separately: (1) wages and salaries

(2) early retirement costs

(3) social security costs

(4) contributions to pension schemes (5) payments for unfundèd pensions (6) other pension costs

(h) a statement showing the movements during the year on long term loans given by the Agency and on current asset investments held;

(i) a statement of outstanding commitments for loans granted and of committed lending in future periods; U) an analysis of liquid resources, as defined by accounting standard FRS1 (revised);

(k) in the note on debtors, prepayments and payments on account shall each be identified separately;

(i) particulars of any transaction, arrangement or contract (other than a contract of service or of

employment with the Agency), including transactions at arm's length,' entered into by the Agency with another party, exceeding £5,000 in value, in which party a board member, an executive, a senior employee, or a person connected with any of the foregoing, at any time during the year, had a direct financial interest that was notified to the Agency. For these purposes, a senior

employee means someone whose emoluments in the year (excluding pension contributions but

including the other elements mentioned in sub-paragraph 3(d), above) exceeded £50,000; and a

connected person shall be as defined in section 839 of the Income and Corporation Taxes Act 1988 or superseding legislation and including a member of the same household;

(m) a statement of losses and special payments during the year, being transactions of a type which Parliament cannot be supposed to have contemplated. Disclosure shall be made of the total of

losses and special payments if this exceeds £100,000, with separate disclosure and particulars of any individual amounts in excess of £100,000. Disclosure shall also be made of any loss or

, special payment of £100,000 and below if it is considered material in the context of the Agency's

operations. * 3(d), 3(e) and 3(n. Under the Data Protection Act 1998, individuals need to give their consent for

some of the information in these sub-paragraphs to be disclosed. If consent is withheld, this should be stated next to the name of the individuaL.

i 113 J

~~~l

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